DeFi Revolution: Compound, Maker and Aave Insights
Hello and welcome, everyone. It's Martin here with CryptoGains. Today, I would like to focus our attention on the revolution provided by DeFi, and, more specifically, we're going to focus on three particular protocols. That's Compound, Maker and Aave.
But, first of all, let's put things into context. DeFi stands for decentralised finance, and essentially, it's both a technology and a movement where teams of researchers and engineers have banded together to reimagine financial services. This is a mouthful to say that these technologies are at the centre of creating a new financial system, which is more inclusive and more decentralised, giving more opportunities but also more freedom to market participants.
These three charts just demonstrate the exponential growth of the DeFi market from April 2020 to May 2021. In just over a year. User growth, more than 1,300%. More than 9,000% growth in the total value locked. And the volume traded on decentralised exchanges has also increased by 8,500%.
And now, going to the specific protocols that we're going to be discussing, these are Maker, Compound and Aave. And you can see that both the amount deposited in lending and the total amount borrowed have also expressed very substantial growth over the past year.
In terms of concrete details of how you can trade these, I'm going to go into that in a minute. But, in the meantime, I just wanted to show you a heat map of the market action from today. Most of the cryptocurrencies are in the red. Of course, the primary reason was the huge sell-off in Bitcoin triggered by the announcement from Elon Musk that Tesla is no longer going to be accepting Bitcoin for payment.And, now, let's take a look at the charts and see how we can trade with some of these insights.
Beginning with Bitcoin versus Tether, the pivot point is $50,000. Above $50,000, buying Bitcoin, with targets at $51,350, the nearest resistance, and then $54,800, which is around the point where the big drop began. Conversely, below $50,000, we could see further retracement, retesting some of the support areas of $47,700 and $46,500 on the short side.
Now we're moving to Ethereum. Looking at the Ethereum chart, ideally, I'd like us to break above $3,895 before initiating long positions, with targets at $4,025 and $4,150. As long as we stay below $3,895, to me, the downside will prevail, with targets on the short side at $3,745 and $3,625.
And, now, we're coming full circle. We're going to discuss the three DeFi protocols that I touched on at the start of the video, beginning with Compound. The pivot point for Compound at the moment is $780, and above that level, good opportunities to buy Compound, with the nearest target on the upside at $810 and $813. Conversely, if we trade below $780, the downside prevails, with targets on the short side for selling Compound, with targets of $770 and $750.
Now we're moving to Maker. The critical level to look for in Maker is $4,970. Above that level, good opportunities to buy Maker, with targets at $5,130 and $5,300. Conversely, if we're below, like at the moment, below $4,970, we may see further declines, retesting the support at $4,700.
And finally, let's take a look at Aave. The level to look for for Aave is $560. Above that level, buying Aave, with targets at $583 and $613. Conversely, below $560, we could see declines to the nearest support areas of $547 and $530.
Here are the insights for today. You can use them for trading. Of course, keep learning with the video education section and the CryptoGains Market Insights subsection. Very important to remember to join the Crypto Signals Made Easy channel for lots of insightful articles. Thanks for joining us today. Trade wisely, and I'll see you soon.