UNI, MKR, AAVE, COMP, ENJ – What explains the variance of panic selling

With the altcoin market cap falling by more than 20% during the week, one thing was certain: panic selling. The bigger the dump, the greater the panic and, therefore, the greater the pain in the market. Well this time was no different and while the Bitcoin and Ethereum hodlers appeared to be sitting tight, some altcoins, especially DeFi tokens, saw massive sales.

Nonetheless, Uniswap, Maker (MKR) and AAVE saw a varied trend from COMP and Enjin.

A recent article noted how tokens associated with DEX and DeFi platforms have, overall, been able to outperform the category of currencies and smart contracts. So, while the m0arket seemed to be more bullish on DeFi, which ones fared better than others?

Fear and panic take over

Panicked sellers and market pain were clearly evident during this market downturn and some DeFi tokens held up better than others due to the presence of stronger hands. In fact, a recent report from Santiment looked at “panic detectors” for DeFi tokens and ranked the coins based on the average panic level of holders during the recent crash.

A look at the trade entries and network profit / loss (NPL) of different alts helps to better assess investor intent. Exchange inflows highlight the number of tokens being moved from non-exchange wallets to exchange wallets, suggesting the intention of holders to sell. On the other hand, NPL calculates the average profit or loss of all coins that change address daily.

Notably, Uniswap experienced minimal “panic” even though inflows were high. The previous UNI fund attracted higher influx peaks as the network profit loss declined slightly, showing a possible loss related to UNI transactions.

Looking back, it’s worth noting that over the past two days, Uniswap’s Total Locked-In Value (TVL) has jumped over 10% from around $ 5.6 billion to $ 6 billion. $ 2 billion, marking a V-shaped recovery from its recent decline.

Source: Sanbase

Maker also had strong hands in the market, as only one spike in currency inflows was seen during the dump. Additionally, while AAVE and COMP experienced a medium to low “panic” sell off, the Enjin coin appeared to be the hardest hit. He saw three strong surges in influx and significant drops in losses throughout the discharge.

What do these pieces look like now?

Even though all of these aforementioned coins saw near double-digit weekly losses, thanks to Bitcoin’s rally, some have accelerated. In fact, each of them were seeing large daily gains before Bitcoin was corrected again on the back of the FUD associated with China.

It should be noted, however, that before that happened, Enjin was at the end of the highest daily earnings, despite also high inflows.

So why this strange trend?

It is interesting to examine why these altcoins made sellers react differently. External factors played a key role in the altcoin rally. Besides the general increase in market cap / TVL which highlighted higher HODLing behavior from market participants, external news of integrations seemed to push some of these coins.

Notably, as of this writing, developments such as MakerDAO announcing the integration of Gelato Network’s G-UNI Uniswap V3 token as a collateral into its protocol have put MKR and UNI in a better social position.

Additionally, the quick and brief recovery in Enjin coin prices could be attributed in part to the NFT mania. In fact, the slowing of the NFT mania along with the dumping of the market may partly explain the strong sales panic that Enjin has seen.


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