- The cryptocurrency market took a downturn on 17 August
- The total DeFi TVL has also declined over the past week, with Ethereum, Solana, Polygon, and Avalanche all seeing significant drops.
- Ethereum failed to reclaim the $1,700 support level and is now showing a fairly strong chance of another drop.
- Solana may recover soon, but only if it can hold above the $20 support level.
- Polygon needs to stay above the $0.54 support level, or it could decline further to $0.42 or lower.
- Avalanche is in a descending triangle, and the sentiment around the token is bearish ahead of a $97.4 million token unlock scheduled for August 26
The end of last week was a tough one to pull through for investors in the crypto market.
On 17 August, Bitcoin suddenly gave up its standing above $29,000 and began to plummet. At the end of the day, the flagship cryptocurrency was miles under, at the $25,000 zone.
Before long, Bitcoin recovered. However, the damage had been done, and investors were left to lick their wounds over the weekend.
Altcoins Suffered As Well
Bitcoin wasn’t the only cryptocurrency to suffer a tragic collapse.
Altcoins like Ethereum, Cardano, Polygon and hundreds of others also followed Bitcoin downwards.
By the end of 17 August, hundreds of thousands of traders had been kicked out of the market with about $1.04 billion in total liquidations.
Bitcoin took the lead with about $500 million worth of liquidations, while the altcoins suffered through the rest.
The crypto fear and greed index has seen a steep decline in investor greed, and things do not look as good – especially for the altcoin market.
Defi TVL is dropping, and top altcoins like Ethereum (ETH), Solana (SOL), Polygon (MATIC), and Avalanche (AVAX) drew the short end of the stick.
According to CoinMarketCap, these cryptocurrencies are now down by 9.7%, 10.67%, 11.75% and 11.22% respectively, as the total Defi TVL and Market Cap continue to drop.
Defi TVL and Market Cap Decline
In an unsurprising turn of events the DeFi TVLs of several chains across the market have declined massively over the last week.
DeFiLlama calculates a -11.07% TVL decline in Ethereum over the last week, -6.18% for Solana, -8.77% for MATIC, and -11.72% for Avalanche.
Others like BSD, Arbitrum and Cardano have also seen particularly massive declines over the last week, and have lost hundreds of millions of dollars of TVL.
Ethereum Bulls Fail To Reclaim $1,700
Last week when the cryptocurrency market entered a mass decline, Ethereum followed suit.
After a high of $1,836 on 15 August, the cryptocurrency declined straight down to $1,550.
This was way below the $1,700 zone (red), validated as support by the 200-day EMA as illustrated above.
As part of Ethereum’s correction phase, the bulls attempted to push it back over this zone. By 20 August, they had successfully pushed Ethereum into a retest of $1,720.
However, the bulls were unable to sustain a breakout above this level. Ethereum has now formed a double bottom somewhere around $1,580 and is showing a fairly strong chance of another drop.
Solana May Recover Soon – Depending On Its Bulls
Solana may have dropped like the rest of the cryptocurrencies on the market.
However, its drop only brought it into a retest of the $20 zone as illustrated below.
Because of this, Solana’s bulls have a base from which to push the cryptocurrency upwards.
However, this presents some interesting things to know.
One of these is that this $20 zone now acts as the only saving grace for Solana. If a break below this mark happens, Solana will inevitably drop straight down to $6.3, and then $12.
However, if Solana does not enter a breakdown of $20, we may see some resistance as it tries to reclaim its 200-day EMA (red) as illustrated above.
On the brighter side, if this hurdle is crossed, Solana now has a great chance of reaching $30, and then $35.
Polygon (MATIC) Needs To Stay Afloat
Just like Solana, Polygon’s decline brought it face to face with a fairly strong support.
Polygon has been stuck under the descending trendline you see above since mid-February.
However, a breakout in early July pushed its price to $0.88.
The Bulls’ victory was short-lived as Polygon began to decline, and ended up back at the $0.54 support.
Like Solana, this presents Polygon with a chance of using $0.54 as a base to push prices further upwards. However, a break below this zone could spell disaster, as Polygon declines further to $0.42 or lower.
Avalanche (AVAX) In A Descending Triangle
The similarities between some of the DeFi cryptocurrencies on this list are interesting.
Just like the others, the market dip brought AVAX into a retest of an established support ($10.32 for AVAX) as illustrated below.
If a descending trendline is drawn and connected to this support, we have a descending triangle.
The question now is: Is $10.32 strong enough to hold AVAX inside the formation?
There might be a few reasons as to why not.
According to recent reports, the sentiment around AVAX is bearish, ahead of the forthcoming $97.4 million token unlock scheduled for August 26.
As it turns out, Avalanche plans to carry out a token unlock of 9.54 million AVAX tokens on Saturday, August 26.
These tokens would be worth something around $97 million at current prices and may be about 80% of Avalanche’s total trading volume in the last 24 hours.
Such a relatively massive amount of tokens hitting the market may not be very bullish news, and it may be wise to be prepared for any “buy the rumour, sell the news” events.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.