Analysts highlight DeFi concerns as Bitcoin stagnates below $40,000

• The S&P 500 remained relatively unchanged.
• Popsicle Finance’s ICE has fallen 22% in the past 24 hours.

On Friday, Bitcoin (BTC) was trading at over $37,000, up about 3% over the previous 24 hours. Meanwhile, after a tumultuous week, several alternative cryptocurrencies have started to settle.

Analysts were also looking for signals of a likely stock market rebound, boosting crypto buying. Over the past week, the S&P 500 has remained relatively unchanged, unlike BTC’s 1% rise and ETH’s loss of 3%.

Investors continue to pull back from US equities despite the expected adjustment in fiscal and monetary policy from the US Federal Reserve. More investors could begin to reduce their holdings of risky assets if the selloff materializes, with cryptocurrencies being the first to be hit. As a result, a price rally could be limited in the short term.

Moreover, given the macroeconomic challenges, several experts fear a repeat of 2017-2018. However, it looks like winter has arrived, as evidenced by the over 40% decline in BTC from its all-time high of around $69,000 in November.

Is there systemic danger in the crypto markets?

The current underperformance of various cryptocurrencies and decentralized finance (DeFi) tokens suggests that crypto markets are riskier. When there is a lot of volatility, some traders may switch to bitcoin, which is less dangerous in the crypto market.

Popsicle Finance’s ICE is down 22% in the past 24 hours, Wonderland’s TIME is down 15%, and Abracadabra’s SPELL is down 15%. Daniele Sestagalli Coins has garnered a loyal following over the past few months due to his community orientation towards crypto projects. At one point, his procedures were worth billions of dollars, but those riches have since evaporated.