Crypto Market Review, Dec. 27

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Arman Shirinyan

Crypto market is still wasteland as majority of assets remain in stalemate


The market remains in a stalemate as the majority of large investors and traders left the industry until the new year. Liquidity and volatility on most trading pairs are at absolute lows, but even in poor market conditions, there are some hidden gems that are breaking out. However, safety should always be the number one priority.

AAVE’s breakout potential

In the last three days, AAVE has been steadily going upward despite the stalemate on the market. The reason behind it does not seem to have anything to do with fundamental changes around the project or any news that would push it upward. The only thing that justifies the growth of the asset would be speculative interest in the token.

AAVE Chart
Source: TradingView

Since November, AAVE has been moving in a sharp descending price range with a slowly decreasing trading volume. The pattern we saw on the daily chart of the asset has been clearly showing reversal potential since the current trend has been slowly fading.

The breakout of the first resistance level reflected in the 21-day moving average will set up AAVE for the breakthrough of the upper border of the rangebound, which will then lead to a complete trend reversal. This was a possibility back in November, when AAVE reached the price level of $96.

The project’s TVL remains at a high level, with $3.75 billion worth of assets locked in various smart contracts on the network. Most of the TVL ($1.8 billion) is in lending contracts, while staking and pool2 correspond to a lower share of the locked value on the network.

Cardano’s TVL on the move

It is a commonly known fact that Cardano is not the “go-to” network for DeFi enthusiasts, as this part of the industry is only originating on the blockchain and has a lot to prove to cryptocurrency investors to attract them to the network. However, some DeFi solutions and platforms already exist and function successfully, which explains how Cardano got $54 million in TVL during the dying market.

Cardano is constantly celebrating launches of new products like Optim Finance that attract additional funding to the platform. Optim, for example, has already gathered more than $1 million in TVL since the launch that happened only a few weeks ago. The biggest TVL holder on the network is Minswap decentralized exchange, with more than $24 million of users’ funds locked on the platform.

Unfortunately, the price performance of Cardano’s underlying cryptocurrency does not correlate with the rising TVL and market capitalization of the network. ADA lost more than 17% of its value in the most recent plunge in December and has not yet found a foundation for a reversal.

At press time, ADA is trading at $0.26 with a 7.6% price increase in the last five days, which is most likely nothing but a correction in the downtrend.

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