Bitcoin (BTC) and altcoins markets lost a total of up to $ 602 billion overnight to a shock caused by Elon Musk.
The billionaire entrepreneur made a U-turn in his decision to accept Bitcoin for the electric vehicles offered by his company Tesla. He cited environmental concerns, noting that mining bitcoin requires lots of fossil fuel burns, especially coal.
Bitcoin prices began to drop sharply within the first five minutes of Musk’s tweets in the late U.S. hours on Wednesday. They plunged further into the Asia-Pacific session on Thursday, recording an intraday low of $ 46,000 at one point, a break from the previous session high of $ 59,592.
Altcoins limited Bitcoin to its overnight losses. They collectively pulled more than $ 367 billion from their market cap, led by massive downward revisions on some of the leading altcoins, including Dogecoin, a meme cryptocurrency that has been rocketed to explosive levels recently due to Musk’s endorsements.
Ether (ETH), Binance Coin (BNB), Bitcoin Cash (BCH) and (LTC) also reported huge falls over the day, having seen gains in previous daily sessions.
Nevertheless, some altcoins managed to survive the brutal crash for a short time due to their strong basic equipment. Let’s take a look at the most notable three.
AAVE turned out to be an exceptional performer as almost all of the top altcoins went down.
The ERC-20 token, which serves as the governance token on the Aave protocol, ended the session by 11.62% to $ 511 on Wednesday, despite hitting its all-time high of $ 640 earlier in the day. It looked obvious that Musk’s anti-Bitcoin announcement was influencing AAVE as much as other altcoins. But unlike its peers, AAVE appeared to be more resilient to sudden falling pressures.
The token maintained its bullish bias on Thursday and traded for around $ 589 as of 0813 GMT.
The basics protected AAVE from severe bearish attacks. First, Aave co-founder Stani Kulechov announced that their decentralized financial money protocol had built a “private pool” for institutional actors. He noted that the new approved pool would serve as an emulator for investors wishing to get used to Aave’s credit and lending services before embarking on the DeFi ecosystem.
The prospect of institutional exposure sustained AAVE’s bullish bias. The upside sentiment was further fueled by Aave’s growing liquidity pool. The company now holds $ 12.83 billion, up from around $ 2 billion earlier this year, according to DeFi analytics platform Defillama.
Alpha Finance (ALPHA)
The next asset in the queue that almost got caught in the waning spree of altcoins but still escaped is Alpha Finance.
The decentralized asset management platform, which now runs a proprietary leveraged yield farming protocol called Alpha Homora, enables its users to submit proposals and vote on operational and strategic decisions if they own ALPHA, the native token. You can also earn ALPHA by providing liquidity to Alpha Finance’s pool.
The Elon Musk shocker prompted ALPHA to take a breather from its predominant uptrend on Wednesday, testing its two-month high for a possible bullish breakout. The ALPHA / USD exchange rate fell nearly 23% from its high of $ 2.465 on Wednesday.
However, the couple has quickly retraced their strides in terms of supportive upside foundations, including a new partnership launch and the continued success of the Alpha Homora Protocol.
The total volume in the Alpha Homora pools was $ 1.35 billion on May 10, compared to the current $ 1.37 billion. At the beginning of 2021, the TVL was around $ 188.5 million. The spike shows that Alpha Homora has run successfully so far.
ALPHA / USD rebounded more than 20% in Thursday’s session, with its recovery steps in line with those of the Alpha Homora TVL. Meanwhile, Alpha Finance announced the launch of Alpha Oracle Aggregator, which includes data from two of the largest data oracle providers, Band Protocol and Chainlink, to “ensure security, scalability and flexibility”.
Bitcoin’s declines have done worryingly little to offsetting ALPHA’s general upside.
The positive correlation of Ether with Bitcoin resulted in a certain amount of lost profits on Wednesday evening. Nevertheless, the second largest cryptocurrency by market capitalization remained stronger in the medium term, similar to Aave and Alpha Finance.
The key takeaway from Ethereum’s decline was its ability to stay above key support levels (moving average waves) despite a strong history of correlation with Bitcoin trends. The ETH / USD exchange rate closed the previous session nearly 8.45% to $ 3,826 from its intraday high of $ 4,055 on Thursday.
Key factors that will continue to contribute to Ethereum’s rise as a blockchain project and investment object include the rise of non-fungible tokens – digital assets that represent ownership of unique virtual objects – and DeFi.
The upcoming upgrade in London in July, which proposes moving the Ethereum blockchain from an energy-intensive proof-of-work to a faster proof-of-stake, promises lower transaction fees and scalability. Bulls expect more crypto projects to go on board and the demand for ETH tokens will increase.
ETH / USD maintains its 7-day profitability – now up 11% – unlike other altcoins. Aave and Alpha Finance were also up 25% and 13% over an adjusted seven-day period.