Aptos (APT) price action has been on a downward trend over the past 18 months. In the last week alone, APT’s total value locked (TVL) has declined by approximately 43% at the time of writing, and this decline shows no signs of slowing down.
Why does Aptos TVL crash?
According to DefiLlama, TVL has been declining over the past two months. At the beginning of June, it stood at around $280 million, but it had lost more than $100 million by the end of the month.
Over the past week, Aptos’ TVL fell from $156 million to $100 million, which equates to a decline of approximately 43%. Excluding active loans, dual accounts, staking, and liquid staking, the TVL stands at $63 million.
One of the key factors behind last week’s sharp drop was Echo Protocol withdrawing a significant amount of liquidity. As a Bitcoin (BTC) focused bridge on Move chains, including Aptos, Echo’s release hit APT the hardest.
This drop was an indication of low user activity. It was supported by the low daily active addresses of around 40.5k. Additionally, profits declined by 72%, from $366k to $103k, according to DefiLlama.
Such a drop could cause traders to withdraw staked APT, considering it less profitable and potentially affecting the security of the chain. In particular, we should not neglect the drop in RWA TVL on Aptos since it has fallen by 70% over the last thirty days.
Together, these factors led to a flight of capital from Aptos.
Is the price of APT responsible for the TVL drop?
Additionally, weak pricing played a role in measuring TVL in terms of USD valuation. When the price of APT falls, the USD value of TVL also falls.
At press time, APT was falling into a trend channel following a breakout in a sideways range. This trend was reinforced by the drop in Open Interest (OI) to around $42 million.
Notably, APT was trading above the channel’s mid-level, a potential sign that bulls may be gaining strength in bearish territory.
Final summary
- Aptos’ TVL collapsed by over 43% in a week due to Echo Protocol’s dwindling liquidity, RWA underperformance, low utilization and profits.
- APT price was falling in a trending channel, with OI reinforcing that traders were not interested in the token.
