Over $36 Billion in DeFi Value Wiped Out — What Does It Mean for Ethereum?
DeFi's Total Value Locked dropped over $36 billion since October, raising concerns about Ethereum's demand and price trajectory.Summary
The Decentralized Finance (DeFi) sector has seen its Total Value Locked (TVL) contract sharply, falling over 21% from a peak of $172 billion in early October to about $136.26 billion in November, wiping out over $36 billion in value. Major protocols like Aave and Lido experienced significant TVL declines. This downturn is partly attributed to Ethereum's (ETH) price correction, which dropped near $3,000 in early November. However, the weakness is deeper, as ETH-denominated TVL has been falling since April, even when ETH prices rose, suggesting that ETH's rally was driven by institutional demand from Digital Asset Treasury funds (DATs) and Exchange-Traded Funds (ETFs), rather than DeFi growth. This institutional accumulation has also slowed, with combined DAT and ETF holdings decreasing from 12.95 million ETH to 12.75 million ETH between October and November, compounded by recent ETF outflows. Weakening demand across both retail and institutional fronts could pressure Ethereum further, although macroeconomic catalysts provided a modest recovery, with ETH trading around $3,609. Analyst Ted Pillows noted that closing above the $3,700 resistance level could lead ETH toward $4,000, while failure to break out might result in a retrace toward $3,400.
(Source：BeInCrypto)