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The crypto market recently faced its worst decline since 2021. Despite this, some DeFi altcoins are already showing signs of a strong recovery.

Ethereum: The DeFi Backbone

Ethereum remains the foundation of the DeFi ecosystem. It benefits from ongoing upgrades that enhance scalability and efficiency. ETH supports many DeFi applications, hosting most of the recovering coins.

On August 5, ETH’s price dropped to $2,100, a 22% decline marking its most significant one-day drop since May 2021. Currently, ETH aims to break the $2,500 mark.

AAVE, COMP, and MKR: Resilient Performers

AAVE, COMP, and Maker (MKR) have shown remarkable resilience. AAVE’s lending protocols and Maker’s governance model attract significant liquidity. Compound (COMP) complements these by enhancing DeFi lending through pooled liquidity innovations. Rocket Pool (RPL) is crucial for Ethereum 2.0 with its decentralized staking services.

Analyst Michael Van de Popper identified AAVE, COMP, MKR, TAO, TIA, and Optimism (OP) as potential strong performers during the market rebound.

In terms of what I expect from the #Altcoins.

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.

— Michaël van de Poppe (@CryptoMichNL) August 5, 2024

Price Movements and Predictions

• AAVE is trading at $98.54, up 18.32% in 24 hours after dropping to $79.41 from $109 on August 4.
• MKR is at $1,942.71, a 2.38% increase from $1,794 yesterday.
• COMP declined by 18% on Monday but is now recovering, trading at $38.34, up 4.31% in the last 24 hours.

RPL, TAO, TIA, and OP Outlook

Market watcher Decilizer suggests RPL might fall to around $9 before rebounding by 80%.

Bittensor (TAO) surged 47.63% to $256.75 after dipping 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.

Conclusion

The DeFi altcoin recovery shows promise, with Ethereum and key tokens like AAVE, MKR, and COMP rebounding. The market’s resilience and upcoming innovations could lead to DeFi Summer 2.0.