Last updated on November 17th, 2022 at 01:54 pm
Decentralized Finance, better known as DeFi, is an emerging FinTech area that brings cryptocurrency’s blockchain or decentralized distributed ledger technology to banking and other financial services. It eliminates the need for intermediaries in cross-border transactions and, by extension, finance, financial services, etc. DeFi aims to decentralize the functions of traditional financial institutions such as banks.
In recent years, the DeFi market has witnessed increased interest from crypto-enthusiasts, venture capitalists, and numerous financial institutions all over the globe.
DeFi platforms can provide users with a variety of financial services such as trading, borrowing, lending, decentralized exchanges, asset management, and other services.
Many DeFi platforms utilize their native tokens to carry out operations and incentivize users. As a result, these coins outperformed Bitcoin (BTC) last year, with the increasing number of consumers switching from centralized financial services.
We have outlined 10 DeFi tokens that we presume will outperform Bitcoin (BTC) in 2022.
- Terra (LUNA)
Market Cap: $40.71 Billion
Terra is a blockchain platform built with the Cosmos SDK that specializes in the creation of stablecoins. Rather than using fiat or over-collateralized crypto for reserves, each Terra stablecoin converts into the network’s native token, LUNA.
LUNA lets holders pay fees to network operators, participate in governance, be a stakeholder on the Tendermint Delegated Proof of Stake consensus mechanism, and peg stablecoins. To link a stablecoin such as TerraUSD (UST), the dollar value for LUNA is convertible in a 1:1 ratio to UST tokens.
Luna Federation raised a billion dollars in a recent private token sale, which will be pegged against USDT as a Bitcoin reserve. This development triggered bullish lightning, culminating in a 75% increase in the last three weeks.
LUNA prices show a remarkable recovery of more than 75% with the news of the $1bn funding. The altcoin grew from $50 and found opposition near the 50% Trend-based Fibonacci level close to $100. However, the higher price rejections evident in the weekly candles warns of a retracement.
Vortex Indicator (VI): The VI lines avoid a bearish crossover in the weekly chart with a sharp bullish divergence.
MACD Indicator: The MACD and signal lines are on the brink of giving a bullish crossover, with the histograms signalling an end of a bear cycle.
Therefore, the breakout of $100 and a successful closing will release the trapped underlying bullish momentum, resulting in a price jump to the $150 mark. Moreover, if buyers overwhelm the trend near $150, the rally continuation will reach $188.
2. Avalanche (AVAX)
Market Cap: $26.28 Billion
Avalanche aims to provide an extremely scalable blockchain solution that maintains decentralization and security by focusing on low costs, fast transaction speeds, and environmental sustainability.
With Avalanche, users can build an unlimited amount of customized or interoperable digital currencies. To run an AVAX-based blockchain, one must pay a monthly subscription fee using the native Avalanche cryptocurrency, AVAX.
The Avalanche Foundation announced a significant effort to attract top projects with a pot of four million AVAX tokens (worth $290 million at current prices).
The project’s specific objective is to enhance the Avalanche smart contract blockchain’s “subnet” functionality, which allows for the creation of blockchains tailored to specific applications, such as Web 3 gaming or decentralized finance (DeFi).
However, 2022 has been a bearish year so far for AVAX coin price, with the coin trading at a 50% discount to its all-time high.
AVAX coin price shows a retracement from the $150 mark resulting in a downfall of 50% in the last three months. Moreover, the higher price rejection in the previous few weeks, near the 23.60% Fibonacci Retracement level, warns of a downfall to the 50-week EMA.
Relative Strength Indicator (RSI): The RSI slope shows the downtrend turning sideways near the 50% mark, with the 14-days average line continuing the downfall.
Directional Movement Index (DMI): The DMI lines maintain a sideways trend in a bullish alignment, but the increasing proximity might shortly result in a bearish crossover. Furthermore, the ADX line keeps falling, indicating a significant loss of trend momentum in the weekly chart.
Hence, the upcoming trend depends upon the price action near the $50 mark and the 50-day EMA. If the downfall shows a reversal from the mentioned support levels, the uptrend could cross above $150 and reach the $200 mark.
3. Oasis Network (ROSE)
Market Cap: 986.34 Million
Oasis, a blockchain focused on privacy, is a relative latecomer compared to other layer-1 blockchains (a category that includes the likes of Ethereum, Solana, and Avalanche). But it’s been getting many users to its network right out of the gates.
Oasis was introduced in November 2020 and received the initial funding of $45 million from investors such as Andreessen Horowitz, Polychain Capital, and Binance Labs. Its goal is to resolve the challenges that hinder DeFi from expanding and bringing in new features, such as private lending, due to security-enhancing technology that permits on-chain data storage.
According to the Messari 2021 Q3 Report, it has received the third-highest blockchain investments. According to Oasis, the company is also among the fastest-growing developer networks within the field and can grow further.
With the recent head and shoulder pattern breakout, the ROSE coin price beaks below the $0.30 mark. The downfall halts near the 23.60% Fibonacci Retracement Level close to $0.20, resulting in a sideways trend. However, a reversal brings the price back above the $0.25 mark, teasing a bullish trend reversal.
The 50-day and 200-day EMA might give a death cross, increasing the bearish threat.
Vortex Indicator: The VI lines reflect the bears are undermining the bullish crossover and reinforcing the bearish alignment.
MACD Indicator: The MACD and signal lines give a bearish crossover putting an end to the bullish histogram.
In conclusion, the ROSE coin price could showcase a reversal trend in summer and create a new all-time high closer to the $1 mark by the next monsoon.
4. SYNTHETIX (SNX)
Market Cap: $196.89 Million
Synthetix is a decentralized exchange (DEX) and marketplace for creating synthetic assets. The protocol was designed to allow users to access the existing assets through synths without the need to keep the tangible asset.
The platform permits users to freely swap and trade synths. There is also the staking pool, where users can put their SNX tokens and get rewarded with a portion of transaction costs through Synthetix Exchange.
The platform monitors the underlying assets using intelligent contract price delivery protocols known as oracles. As a result, Synthetix allows traders to trade synths seamlessly, with no problems with liquidity or slippage. Synthetix also eliminates the need for third-party intermediaries.
SNX coin price shows a phenomenal recovery week resulting in the trendline breakout after an 85% retracement. Speaking of retracement, the downfall came from $25 to the close to the Binance listing price of $2.5.
MACD: The reversal helps the MACD and signal lines give a bullish crossover in the weekly chart reflecting a boom in buying pressure ready to reach higher.
Vortex Indicator: The VI lines give a bullish crossover in the weekly chart projecting a trend reversal.
In conclusion, the trendline breakout brings an excellent entry opportunity that may cross above the Fibonacci level as the bulls resurface. Investors can expect the rally to surpass the $25 mark by this year’s end.
5. FANTOM (FTM)
Market Cap: $4.046 Billion
Fantom explores an innovative consensus mechanism that is scratch-built to allow DeFi and other related services to use smart contracts. This mechanism promises high capacity, two-second transaction finalization, and enhancements to security over the traditional Proof-of-Stake (PoS) algorithms.
Intending to match Ethereum, the project appeals to developers seeking to develop decentralized solutions. According to its official documentation, its mission is to “grant compatibility between all transaction bodies worldwide“
FTM coin price finds support at the psychological barrier of $1 after a downfall of 65% from the high of $3.35. The crucial support level helps the bulls regain trend control resulting in a 25% reversal in the last two weeks.
The crucial EMAs in the weekly chart maintains a bullish alignment and have helped the price find support at the 100-week EMA. However, the 50-week EMA provides resistance to the recovery rally.
Nonetheless, the lower price rejection near the 23.60% Fibonacci level and the breakout of the 38.20% increases the trend reversal possibility.
The VI lines give a bullish crossover, while the MACD and signal lines maintain a downtrend in a bearish alignment. Hence, the technical indicators project opposing views, but a crossover in the MACD indicator will turn the dials bullish.
6. TEZOS (XTZ)
Market Cap: $3.60 Billion
While staking is commonplace across different blockchains, Tezos has a unique method. Users can be involved in the governance of the network through “baking” where they effectively invest 8,000 XTZ each. This provides an incentive for participants to act honestly.
Bakers are then tasked with voting on any proposed changes to the blockchain’s code in a four-step process that can take up to 23 days. First, proposals that favour the majority of users will be tested in a testnet for up to 48 hours before being adopted if an overwhelming majority approves them.
Tezos stands out due to how well it is being used by notable organizations. For example, in September 2020, it was revealed that Societe Generale, a prominent French bank, intended to utilize the blockchain to evaluate the feasibility of a central bank digital currency (CBDC).
Like many other blockchain organizations have been doing in 2022, Tezos is itself seeking to boost its popularity through a recent sponsorship agreement with the European football giant, Manchester United.
The XTZ coin price shows a double bottom pattern, indicating a trend reversal after a 60% downfall. The bullish pattern is formed at the base of $3 and creates a neckline at the $4.35 mark. Hence, with the bullish breakout, one can expect a rally surpassing the $10 mark.
The RSI slope surpasses the 14-week average, pointing out a surge in the underlying bullishness and starting a recovery phase. Furthermore, the MACD and signal lines are on the verge of giving a bullish crossover.
Hence, the increasing reversal possibilities bring an exceptional entry opportunity with the potential of creating a new all-time high near $16.
7. Theta Network (THETA)
Market Cap: $4.07 Billion
Theta‘s primary business idea is to centralize data streaming, video streaming, and edge computing to make it more cost-effective, efficient, and fair to all participants in the industry. The network is based on a native blockchain that uses two native tokens called Theta and Theta Fuel to power an internal economic system.
Theta’s popularity stems from three factors:
- Users are rewarded for using higher-quality streaming;
- Content creators make more money; and
- Intermediaries using video platforms save money on infrastructure construction while increasing advertising subscription revenue.
THETA coin price action forms a double bottom pattern (similar to that observed in the Tezos price chart). The double bottom includes the base at $2.35, with a neckline at $3.65. The bullish breakout will likely drive the price higher above the long-coming resistance trendline. Hence, the rally sustaining above the $7 mark may generate an outstanding opportunity.
The MACD and signal lines give a bullish crossover indicating a trend reversal in the weekly chart. Furthermore, the RSI line outperformed the 14-week average reflecting a surge in underlying bullishness.
However, the price trades below the bullish aligned 50 and 100-week EMA projecting a downward trend. Nonetheless, the increasing reversal possibilities can shortly push the prices higher above the averages. As a result, investors might expect the THETA coin price to hit $22.
8. RUNE
Market Cap: $2.3 Billion
The THORChain (RUNE) price rebounded from the July 21’ low mark of $3, validating this level as legitimate support. The recovery rally showcased four consecutive weekly green candles, registering a 200% gain.
The buyers have reclaimed a shared resistance of $10 psychological level and 20-50-day EMAs, indicating a further growth potential for RUNE price.
The Relative Strength Index: The RSI(51) slope enters the bullish territory, indicating a turntable in traders’ sentiment.
The MACD indicator: A bullish crossover among the MACD and signal lines provides a buy signal for long traders.
If traders sustain above the $10 level, the buying pressure would accelerate and pump the altcoin to the next significant resistance at $20 and reach the $38 mark.
9. Pancake (CAKE)
Market Cap: $1.5 Billion
Since the Pancake (CAKE) price turned down from its All-Time High of $44.18, the traders have been aggressively selling on downtrend rallies using a descending trendline.
On January 27th, the sellers breached crucial yearly support of $9, accelerating the ongoing sell-off in the market. The post-retest downfall has tumbled altcoin by 35%, bringing it to $5.6.
The Exponential Moving Average (EMA): A bearish sequence among the crucial EMAs(20, 50, 100, and 200) accentuates a bearish trend. Moreover, the 20-and-50 EMA provides a dynamic resistance to the CAKE price.
The Relative Strength Index: Contrary to the lower low formation in price action, the rising RSI slope indicates a bullish divergence. It indicates that the coin’s underlying bullishness is strengthening and a breakout from the resistance trendline is likely to occur soon.
The CAKE price action squeezes up the descending trendline and $7.5. A breakout of $15 will trigger the next rally, with a potential to touch $71.
10. Loopring (LRC)
Market Cap: $1.5 Billion
The Loopring coin was one of the top gainers during the November 2021 crypto rally, making an All-Time High of $3.3 on Nov 10th. Unfortunately, the sellers pulled the coin price from this level and initiated a new downtrend. The altcoin currently trades at $0.69, indicating an 82% loss from the ATH.
The buyers currently retest this bottom support($0.69) to regain the bullish momentum.
The Exponential Moving Average (EMA): the LRC sellers reclaim a bearish sequence with the recent bearish crossover of the 100 and 200-day EMA. Moreover, the 20-day EMA provides a dynamic resistance to the coin price.
The Relative Strength Index: The RSI slope shows an evident bullish divergence, indicating the bullish momentum is gradually increasing. This positive divergence should bolster buyers to escape this current accumulation phase.
If buyers bounced back from the $0.68 support, the coin price would rally to the $1.17 resistance, following the $0.84 breakout. For traders to expect a genuine recovery, the altcoin needs to breach the $1.17 resistance.
NOTE: THIS IS NOT FINANCIAL ADVICE (NFA); PLEASE DO YOUR OWN RESEARCH (DYOR)
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