DeFi blue chips MKR , COMP are outliers in Bitcoin season, rally driven by fundamentals
- Alt season ended with Bitcoin’s rising dominance, but MKR and COMP are fighting the trend.
- The price rallies of the two blue chip DeFi tokens are attributed to their fundamental development progress rather than market-wide news.
- The DeFi Blue-Chips Index market capitalization climbed 39.7% between June 2023 and now.
Alt season, the period of time marked by capital and profit rotation from Bitcoin to altcoins, has ended alongside July. Entering August, Bitcoin dominance is still on a decline, but altcoins among the top 50 assets have failed to outperform BTC.
MakerDAO (MKR) and Compound (COMP), two blue chip DeFi tokens, emerged as outliers, driving the DeFi Blue-Chips Index 39.7% higher between June and the time of writing.
Also read: Litecoin price coils less than 1,000 blocks away from the LTC halving event
DeFi blue chips driving the market capitalization this Bitcoin season
Based on the alt season tracker from Blockchaincenter.net, it is now officially Bitcoin season. The index reads 27 on a scale of 0 to 100.
Alt season index from Blockchaincenter.net
While traders continue to ape into meme coins and DeFi tokens, and Bitcoin dominance continues to wane, cryptocurrencies in the top 50 assets by market capitalization have failed to outperform BTC in the past 90 days. This determines a definitive end of July’s alt season and a start to Bitcoin season in August 2023.
The index tracks alt season on a month-on-month basis as well, where the performance of the top 50 altcoins is monitored against Bitcoin in a 30-day timeframe. This is how July turned out to be altcoin month.
Analysts at crypto intelligence tracker Glassnode have identified two DeFi tokens leading the DeFi Blue-Chips Index.
DeFi Blue-Chips Index (ETH) as seen on Glassnode
Among the top eight DeFi tokens, MKR and COMP stand out. On close analysis, it is clear that these tokens’ performances are related to their project fundamentals rather than wider market developments.
On June 28, the COMP founder and CEO left the project to focus on regulated finance. COMP price rallied nearly 83% in the week following the announcement. Similarly, MakerDAO activated its Smart Burn Engine buyback program and utilized DAI stablecoins to purchase MKR from the Uniswap pool.
The removal of nearly $7 million in MKR from the token’s circulation within a month drove the MKR price higher – 43% within a week.
Weekly price performance until Week 4 July 2023
At the time of writing, MKR and COMP are trading at $1,338 and $65.22, respectively.
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Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
