Ethereum (ETH) Market Cap Falls More Than $124 Billion In Six Weeks

News BTC

Ethereum, the second-largest cryptocurrency by market capitalization, is currently in freefall. Over $124 billion in capital vanished from the Ethereum (ETH) decentralized finance (DeFi) in six weeks.

Seven months ago, ETH reached its highest value ever at $4,891.70 on November 16, 2021. But it is now trading at around $1,100, which is less than 75.2% of its all-time high value.

How To Get Free Crypto  

Related Reading | Controlling The Chaos: FTX Exchange Bails Out BlockFi With $250M

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

The start of 2022 was unstable for the cryptocurrency market, particularly ETH, but in previous weeks, things have become much more complicated. However, the larger crypto market continues to fall due to macroeconomic uncertainty fueled by an unstable stock market, interest rate hikes, and the fear of crisis.

The Ethereum DeFi Market Is Deleveraging Dramatically

Glassnode, a blockchain analytics firm, released a report on June 17. The report was titled “The Great DeFi Deleveraging.” The report stated that over $124 billion in the capital had been drained out in only six weeks from the Ethereum DeFi market. As a result, its market value is deleveraging rapidly.

According to their statement, many reasons have sparked a wide range of margin calls, liquidations, and deleveraging. These reasons include worldwide monetary policy tightening, the growing strength of the US dollar, and decreasing values of risk assets.

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?

Get 110 USDT Futures Bonus for FREE!

Their analysis looks at some early warning signs that predict a drop in ETH usage and community demand after the November 2021 all-time high of ETH value.

Coinbase Banner  

They claimed that on-chain activity and Ethereum gas prices had decreased over six months. This indicates a drop in overall Ethereum network activity.

ETH is currently trading below $1,100 on the daily chart | ETH/USD chart from Tradingview.com

 As stated in the report:

Across many facets of the Ethereum ecosystem, the demand profile has been waning, with general application usage in decline, and network congestion easing after the Nov 2021 ATH, and a cooling off of NFT markets becoming evident in recent weeks.

TVL on Ethereum Dropped By 60%

According to the report, Ethereum’s TVL (Total Value of All Ether) dropped by 60% in six weeks. The decline occurred in two stages. In May, the Terraforms Lab’s project collapsed and caused a $94 billion loss. And in June, ETH fell below $1,000, resulting in a $30 billion loss.

By the report, there have only been two higher magnitude deleveraging events: 

The first being -46.0% associated with the recent LUNA collapse and -37.5% during the sell-off from the then-ATH set in May 2021.

The combined market valuation of the top four stablecoins USDT, USDC, BUSD, and DAI has now exceeded the market valuation of ETH by $3.0 billion.  

Related Reading | Why The Inventor Of Ethereum Attacked This Bitcoin Pricing Model

Glassnode stated that the deleveraging event taking place is painful and is similar to a mini-financial crisis. However, they added that although this is difficult, it provides an opportunity to eliminate excess leverage and rebuild healthily.

FreeBitcoin Banner  
            Featured image from Flickr and chart from TradingView.com

Go to Source
Author: Saeed Hassan


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.