Bitcoin’s price action usually affects most of the crypto market, and the largest altcoins like ETH are no exception. But that’s the story of the spot market, what about the DeFi market? Are They Really Correlated?

SPELL is growing faster than ETH and SOL

As the market slowly recovered from its deep decline on December 4th, some smaller altcoins rebounded faster than others. SPELL is a prominent name among them.

The Abracadabra Protocol’s native token was used to mint Magic Internet Money, increasing in value by 93.4% in just 2 days.

SPELL 4-Hour Price Chart | Source: TradingView

Abracadabra is a reputable protocol with a Total Locked Value (TVL) of over $ 4.8 billion and works on many top chains like Ethereum, Avalanche, Fantom … This is the reason why this coin also records large blocks.

Total value locked on Abracadabra | Source: DeFi Lama

The inflow of 48 million SPELL in 2 days is evidence that the recovery of this altcoin was spontaneous. This could be because the protocol has been actively expanding its reach over the past week. Abracadabra was recently introduced on the Terra chain after joining Binance Smart Chain last month.

SPELL isn’t the only coin to outperform, however. BabySwap’s BABY token has also risen over 150% in the past 72 hours, setting a new ATH of $ 4.49. This metaverse token, derived from Binance Smart Chain, has piqued the interest of investors due to its social attractiveness.

Social indicators from BABY | Source: Antiment

The fact that tokens like BABY are soaring is surprising, given that most decentralized exchanges lost around 4 to 45% in both TVL and volume during the week. This shows that the DeFi market cannot be decoupled too much from the spot market, as it has a certain influence on the movements of the DeFi market.

This is also why the DeFi Pulse Index rebounded 15% in one day after falling 14% in 3 days, as the protocol’s native tokens rise higher than spot altcoins due to the recovery momentum of the broader market.

DeFi momentum index | The source: TokenSets

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