Are These Altcoins About To Break Out? Analyst Nicholas Merten Looks at One Hot Sector of the Crypto Market
Widely followed crypto market analyst Nicholas Merten is expecting altcoins in the decentralized finance (DeFi) sector to rally.
In a recent market update, Merten tells his 472,000 YouTube subscribers that the overall DeFi sector looks ready to break out to new all-time highs.
“I think that this is a broader trend in the crypto space. And there’s a lot of other plays in DeFi, not just in the Ethereum ecosystem [but] in the broader cryptocurrency space, that are going to do well.”
He notes that DeFi dominance over the total crypto market recently bounced back to the previous highs of May 2021, which historically suggests that a push further could be coming.
“And it looks like, as we’ve seen time and time again, when we come back here and revisit the highs, we’re gonna be setting in new all-time highs at a much more distant level, we’re gonna add a couple percentage points of dominance.
With DeFi’s total dominance over the crypto market sitting at 6.5%, Merten expects DeFi dominance to grow to 8% or 8.5% over the coming weeks or months.
He takes a look at the decentralized exchange Uniswap (UNI), which jumped more than 23% on Sunday. The asset is currently priced a bit below its rally high, trading at $23.55 according to CoinGecko.
UNI’s recent spike in both price and volume tells Merten that not only UNI but also the DeFi sector as a whole could be heating up.
“This is one of the biggest leaps we’ve seen in one of the large plays in the crypto space, and it’s something to take note of because it’s not just in a sense [of] price but in a sense of volume between practically any pair we can watch.
We can see that this started to wipe away almost a month’s worth of sell-side pressure down to the downside in USD or BTC terms.”
Finally, Merten highlights the decentralized lending protocol Compound (COMP), which he thinks is set to break out after doubling against BTC (COMP/BTC) in 2021.
“COMP has been one that I really think has been one of those blue-chip DeFi plays that has stood the test of time. And along with that, since the start of the year has done a double performance against Bitcoin.
It’s really starting to showcase those higher lows here, consistent resistance range, where I think again we could start to see a breakout.”
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