Aptos’ [APT] price action has been trending downward for the past 18 months. Last week alone, APT’s Total Value Locked (TVL) declined by about 43% as of writing, and the decline shows no signs of slowing.
Why is Aptos’ TVL crashing?
According to DefiLlama, TVL has been falling over the past two months. In early June, it was around $280 million but lost over $100 million by the end of the month.
In the past week, Aptos’ TVL tumbled from $156 million to $100 million, equivalent to about a 43% drop. Excluding active loans, double counts, staking, and liquid staking, the TVL stands at $63 million.
One key factor behind last week’s sharp plunge was Echo Protocol pulling a significant amount of liquidity. As a Bitcoin [BTC]-focused bridge on Move chains, including Aptos, Echo’s exit hit APT the hardest.
This drop was an indication of low user activity. It was backed by the low Daily Active Addresses of around 40.5K. Additionally, earnings have declined by 72% from $366K to $103K, as per DefiLlama.
Such a decline could cause traders to pull out staked APT, viewing it as less profitable and potentially affecting the chain’s security. Notably, the decline in RWA TVL on Aptos should not be overlooked as it dropped 70% in the past thirty days.
Together, these factors led to capital flight from Aptos.
Is APT’s price responsible for the TVL drop?
Moreover, weak price performance played a part when measuring the TVL in terms of USD valuation. When the price of APT drops, the USD value of the TVL also drops.
At press time, APT was falling in a trend channel following a breakdown from a sideways range. This trend was reinforced by Open Interest (OI) crashing to around $42 million.
Notably, APT was trading above the mid-level of the channel, a potential sign that bulls may be gaining strength in bear territory.
Final Summary
- Aptos’s TVL crashed more than 43% in a week due to Echo Protocol pulling liquidity, RWA underperformance, low usage, and earnings.
- APT price was declining in a trend channel, with OI reinforcing that traders were not interested in the token.