The capitalization of the altcoins market — cryptocurrencies alternative to the bitcoin — broke through a level of resistance that had lasted since 2017. The US$140 billion mark has been surpassed thanks to factors such as the DeFi industry (or decentralized finance) and Ethereum 2.0.
In other words, with the advance of decentralization and the movements involving Ethereum, bitcoin’s centrality position in market capitalization is being diminished, making room for the altcoins.
Capitalization of altcoins still far from the peak of 2018
A few days prior to altcoins breaking the resistance level, bitcoin’s dominance in the market fell to its lowest level in 12 months. According to CoinTelegraph, the main cryptocurrency now represents 61% of the combined capitalization of the sector. In May, this percentage was 67%.
Despite having overcome the level of resistance, the capitalization of altcoins is still quite far from the record in January 2018. At the time, the market for cryptocurrencies alternative to bitcoin totaled US$ 541 billion.
BeInCrypto notes that considering the resistance range between US$140 billion and US$180 billion, if the capitalization exceeds that last figure, it could be a sustained bullish signal in the altcoins’ price. Nevertheless, it observes that the current peak may be brief and followed by a correction.
Why is DeFi so interesting?
One of the reasons is because DeFi assets have been used, for example, to obtain income in the market. Users lend their cryptoassets leveraged, gain exposure to other cryptoassets, and use these digital currencies for greater gains.
With this, DeFi assets become a success and attract more and more people. Thus, the total blocked amount (TVL) in DeFi projects rose from US$ 680 million to US$ 4.69 billion in the accumulated this year, according to BeInCrypto.