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The crypto market just witnessed a steep decline, noted as the worst drop since 2021. However, investors are keeping a close eye on some altcoins, mostly DeFi tokens, which are already showing a remarkable recovery despite still being in the dip.
Altcoin king Ethereum is leading a price recovery, resulting in a potential resurgence in decentralized finance, termed “DeFi Summer 2.0.” Due to their market strengths, AAVE, MKR, COMP, RPL, TAO, TIA, and OP are positioned as key players. Technical analysts predict significant growth potential, with optimism driven mainly by the recent recovery.
Ethereum: The Backbone of DeFi
Ethereum continues to be the foundation of the DeFi ecosystem, benefiting from ongoing upgrades that enhance scalability and efficiency. Its platform supports numerous DeFi applications, which host most recovering coins.
On August 5, ETH’s price plunged to a floor of $2,100. It exhibited a 22% drop that marked the altcoin’s most significant one-day decline since May 2021. Currently, ETH is striving to break the $2,500 mark.
AAVE, COMP, and MKR Pass the Bearish Test
AAVE, COMP, and Maker (MKR) have also shown resilience. AAVE’s lending protocols and Maker’s governance model attract significant liquidity. Compound (COMP) complements these by bolstering DeFi lending through pooled liquidity innovations. Also, Rocket Pool (RPL) is critical within Ethereum 2.0, with its decentralized staking services.
In a recent post on X, analyst Michael Van de Popper identified AAVE, COMP, MKR, TAO, TIA, and Optimism (OP) as potential strong performers as the market rebounds.
In terms of what I expect from the #Altcoins.
— Michaël van de Poppe (@CryptoMichNL) August 5, 2024
Some have showed some incredible momentum.
I think everything surrounding DeFi $ETH is going to be doing strong – $AAVE, $RPL, $MKR, $COMP, but also things like $TAO, $TIA, $OP or newer coins like $W, $OMNI & $REZ will do well.
Notably, AAVE is trading at $98.54, up 18.32% in 24 hours after dropping to $79.41 from $109 on August 4. Also, MKR is at $1,942.71, a 2.38% increase from $1,794 yesterday. Also, on Monday, COMP declined by 18% but is now recovering and trading at $38.34, up 4.31% in the last 24 hours.
RPL, TAO, TIA, and OP Outlook
Market watcher Decilizer suggests that RPL is currently facing resistance and might fall to a support level of around $9 before rebounding by 80%.
Bittensor (TAO), highlighted as strong in AI-driven cryptocurrencies, surged 47.63% to $256.75 after a dip to $163.78. Crypto Ideology brands TAO as “the ultimate AI play,” suggesting it could surpass $2,000 this cycle.
Celestia (TIA), despite a downtrend against BTC, is trading at $4.90, up 7.15% in 24 hours. Optimism (OP), introducing key Layer 2 solutions for Ethereum, is trading around $1.27, up 13.48% from $1.07 in 24 hours. Decilizer predicts that if OP maintains support around $1, it could reach $2.6, driven by market sentiment and Bitcoin performance.
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