Defi Land Token
Analyzing Past, Present, and Future price of $DFL
Disclaimer: The information provided in this article is only for educational purposes. You are to take full responsibility for your investment decisions if you consider it financial advice.
It’s obvious that $DFL has been massively bearish since token listing till March when it started ranging in price. Whales who bought the tokens during the IDO and scalped heavy with the price fluctuations after token listing dumped their bags crashing the price of the token. This was very expected as history has repeated itself over and over again in this space.
Asides from the fact that the crypto market is generally bearish, you will get to know other reasons for the continuous dump in price after IDO and the current range or accumulation happening then try to predict the future price movement with the data gathered so far.
Whales refer to individuals or entities who own or hoard a huge portion of a coin or token supply.
$DFL MARKET ANALYSIS
Market analysis is the study of deciding whether and when to buy or sell a cryptocurrency.
I will be using TradingView for my analysis. It might be a bit difficult for some non-traders to easily comprehend some things. Be assured that I will be using just a few trading concepts to keep things straightforward and I will try my best to break down the market concepts in the simplest way possible.
TradingView is a free charting platform with a vast number of tools used for market analysis.
Monthly Timeframe
Since $DFL is just a few months old, you don’t expect to see many candlesticks on the monthly timeframe. As you can see, there are only four candlesticks on the monthly chart. As long as you can see past price data, there is still something to deduce. I have been able to mark out the low and high prices of the token which are 0.1497 and 0.0100 respectively.
March was bullish but the momentum wasn’t convincing enough. On the fundamental side, there was a big announcement made in the discord community about an accomplished milestone on 1st March which could have been a trigger for people to buy $DFL, hence the slight bullish momentum in price. A marked FVG formed in between the first and the third candle. Let’s head to the weekly timeframe.
A candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period.
FVG or Fair Value Gap: When there is a Fair Value Gap on the chart, there’s a very high probability of price covering up that gap in the future. In this case, the FVG spotted was in a bearish scenario. Therefore, to cover it up, the price has to be bullish.
Weekly Timeframe
As I keep going to the lower timeframes, there will be more details to work with. The market structure is getting visible. I adjusted the FVG to the weekly timeframe. I also marked out an OB(Order block), which is a very important level on any price chart. A good number of people buying $DFL now are frequent users of Defi Land. Why was the second week of February a bullish week for $DFL? See the possible reason below.
Another thing anyone can notice is that the red candles are having lesser momentum i.e. selling pressure is getting lower lately as there have now been upgrades in the Defi Land game that would increase the utility of the token.
Daily Timeframe
Due to the nature of the candlesticks on the lower time frames, I will have to stop my technical analysis on the daily timeframe. On the daily timeframe, we see that the $DFL price is making a series of higher highs on the chart. There have been Relatively Equal Highs and Lows marked out. Price is currently respecting the equal low by giving more discount offers. Is it possible for bulls to come in on the marked-out Order Block? Of course. As we can see, the selling to buying momentum is much lower.
However, the recent AMAs have the team leader laying emphasis on the mobile version of the game which will be released soon with improved Graphics. While mobile phone gamers will be anticipating the release, some must have seen this as an opportunity to bag more $DFL prior to the release.
THE CRYPTO J-CURVE WITH $DFL
The crypto J-curve is a model by Chris Burniske that shows how the market values a cryptocurrency over time. It is applicable to mostly utility tokens and the utility tokens should be good project tokens.
Tokens with no utility have no use cases and all tokens with no use case will eventually go to zero.
CUV(Current Utility Value): The CUV can be referred to as the use cases presently available to enable token usage. The percentage of $DFL holders in the CUV are people using $DFL to access its related protocols. On Defi Land, this includes the staking or reward mechanism, upgrades of NFTs on the gamified platform, and so on. Lately, people used the $DFL token for the NFT watering event that ended on 18th March. To know more about the watering event, refer to the article below.
DEUV(Discounted Expected Utility Value): The DEUV can be referred to as the estimate of the number of use cases or utility the token is going to have. The percentage of $DFL holders in the DEUV are the speculators that buy the token for future gains. On the crypto J-curve infographic above, I marked out three points stating the percent of holders due to CUV and DEUV at each point and I give more details about them below.
At point A, people believe the token will do well when the token gets listed in the market for trading. $DFL was listed on some decentralized and centralized exchanges. However, the use cases for $DFL were not fully developed.
The cause of DEUV drop from point A to B is because:
- Loss of token holders causing price dump.
- Extreme speculation.
- Fear.
- Loss of investor sentiment.
Refer to the article below to know more about IDO and listing.
At point B, the team alongside their developers is working on the project to develop as many use cases as they can and many partnerships are being built. Developers use $DFL to test the new functions integrated from time to time before announcing them to the community. Asides from the team and developers, a good number of people are holding $DFL because of the use case not putting price into consideration.
At point C, the project has developed various use cases for $DFL People start buying for both the use case and long-term price increase. The project starts to blow up.
The cause of price increase from point B to C is because:
- Constant Updates from the project and more development.
- The project has an active and growing community.
- Representative of the project spread the ‘gospel’.
Question: Which point is the $DFL token on the crypto J-curve cycle?
Answer: It’s definitely not A and also, I’ll leave that for you to deduce based on your convictions.
TOKENOMICS
When analyzing the price of a token, one of the first things you put into consideration is the tokenomics. From my research, $DFL is a deflationary token and the token distribution is reasonable and in line with their long-term visions and goals.
Refer to the article below to know more about the tokenomics of $DFL.
Deflationary tokens are tokens that have a fixed total supply and no more tokens will be minted into the supply.
Tokenomics is the subject of understanding the supply and demand factors of cryptocurrency.
CONCLUSION
In this article, I have combined technical and fundamental analysis to show you why there was a certain bias in price movement from monthly to daily timeframe. I have also used the crypto J-curve model to lay more emphasis on what to expect in the future. Following up on $DFL from here will require you to be active in the discord community, following updates on the project’s social media platforms, and doing more research. I made a Twitter thread comparing Defi Land to other farm simulation games.
