Institutions turn to DeFi with over $260 billion in TVL as Bitcoin demand weakens

The total value locked among DeFi protocols has reached an all-time high at $267 billion.
A growing number of institutions have been dabbling in the DeFi space as a recent report noted a greater appetite in ETH used to borrow and lend across Dapps.
The demand for Bitcoin has trended downward in Q3 as there was a lack of opportunities for traders.

Sarah Tran Independent Analyst

Decentralized finance has resumed its growth recently as the cryptocurrency market proceeded with rallies in the past few weeks, with total value locked (TVL) reaching an all-time high at $267 billion. According to a recent report, Bitcoin demand has slowed down in the third quarter due to the lack of opportunities for traders to profit.

DeFi expands as Bitcoin lacks behind

Following the tremendous Bitcoin rally in October, the TVL in DeFi surpassed $260 billion, according to DeFillama. Protocols that support the DeFi ecosystem, including Ethereum, Solana and Avalanche, have also seen a considerable climb in their prices. Solana recently reached a record high at $260.

TVL in DeFi

Daily transactions have also soared on the DeFi protocols, including PancakeSwap, which runs on the Binance Smart Chain. The network witnessed a rise in active users to above 600,000, with the number of active addresses on the protocol soaring to 2 million.

According to the Q3 report by Genesis, the number of institutions entering the DeFi industry has been growing. There has been an increase in appetite for Ether from large companies to borrow and lend across various decentralized applications (Dapps).

This could also be due to a “significant structural change” in the cryptocurrency market, as retail exchanges started to deleverage. During the second quarter of 2021, several digital asset exchanges limited their leverage offerings, including Binance, which reduced its levels to a maximum of 20x for accounts that have been opened for less than a month.

Genesis further highlighted a decline in the weighting of Bitcoin in its overall portfolio due to the lack of BTC-denominated trading opportunities. While interest in the leading cryptocurrency witnessed a downturn, emerging Layer-1 protocols including Solana have witnessed a boost in demand, serving as natural liquidity pairs for DeFi yield opportunities.

Bitcoin price projects bullish target at $71,000

Bitcoin price appears to have sliced above a critical resistance trend line, suggesting that the leading cryptocurrency is ready for a climb toward $71,000.

Bitcoin price has formed a symmetrical triangle pattern on the 4-hour chart, suggesting a move of 13%. Since the bellwether cryptocurrency broke above the upper boundary of the prevailing chart pattern, which puts the optimistic target toward $71,594 on the radar.

BTC/USDT 12-hour chart

The first line of defense for Bitcoin price is at the upper boundary of the governing technical pattern at $63,208, then at $61,840, where the 21 and 50 twelve-hour Simple Moving Averages (SMAs) intersect.