The DeFi sector has been on the up and up throughout the past few weeks, with the post-Summer downtrend first reversing earlier in early-November when Yearn.finances YFI token bottomed out at $7,500 and saw a massive overnight surge up towards $18,000.
From this point forward, the cryptocurrency has been climbing higher every week, showing signs of strength and creating tailwinds for the rest of the market.
YFI wasnt the only blue-chip sector benchmark that reversed its downtrend earlier this month, as many other major tokens rallied in tandem.
This sector-wide movement was bolstered by the strength seen by Bitcoin, Ethereum, and the rest of the cryptocurrency market.
ETHs rise has been particularly impactful for smaller DeFi assets that gain most of their trading volume from Uniswap, as their 50/50 pools are denominated in Ethereum.
One investor is now noting that although these higher-beta DeFi assets have been widely expected to outperform the rest of the market, they are lagging far behind the supposed benchmark tokens within this sector.
DeFi Market Closely Tracks Ethereums Price Action
Ethereum has been guiding the altcoin market as of late, with its price action largely hinging upon Bitcoin.
Currently, ETHs bulls and bears are battling to hold the cryptocurrency above $600. The selling pressure seen above this price level has been significant and may continue hampering its price action until Bitcoin can break above its all-time highs.
The DeFi perpetual swap basket on FTX – which tracks the performance of a handful of the top sector-specific projects – is up from its monthly lows of $800, with its current price sitting around $2,400.
This, however, marks a massive decline from its recent highs of $6,000 that were set just a couple of weeks ago. This indicates that investors are uncertain about where this fragment of the market will trend next.
It is important to keep in mind that this gives a general indication of the sectors performance, as the DEFI-PERPs exact price is influenced by margin use, funding rates, and other metrics.
Blue-Chips Lead Sectors Rebound
One prominent investor noted in
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