Key Takeaways
Popular crypto investor Arthur Hayes anticipates a major upswing in decentralized finance (DeFi) tokens, contingent on ETH performance. ETH has recorded significant capital inflows recently, with select DeFi projects already capitalizing on the momentum.
Ethereum [ETH] continues its strong rally, with its market capitalization approaching the $500 billion mark.
Some investors believe this run could benefit DeFi assets the most, with several major indicators pointing in that direction.
In fact, AMBCrypto identified potential outliers likely to benefit from ETH’s capital gains.
ETH szn: The DeFi boom begins, says Hayes
Arthur Hayes, founder of Maelstrom—a fund focused on decentralized tokens—shared on X in the early hours of the 17th of July that his attention has shifted to DeFi verticals as the “ETH szn” kicks off.
He believes Ethereum’s continued outperformance will have a positive spillover effect on the broader DeFi market. Hayes stated,
“The best in class for every DeFi vertical. Some charts are better than others, but they will all rip if $ETH continues outperforming,”
Currently, ETH’s market performance is reflected in DeFi activity, with both segments closely aligned.
DeFi tracks Ethereum’s momentum
As predicted, the DeFi sector appears to be moving in tandem with ETH. The Artemis Sector Performance metric confirms this correlation.
This metric uses a weighted average based on changes in the fully diluted market capitalization of tokens within each sector.
Source: Artemis
Over the past seven days, Ethereum ranked as the third-best-performing sector with 14.2% growth. Meanwhile, the DeFi sector placed fifth, rising by 10.6%.
This narrow gap indicates that DeFi tokens are preparing for a shift. A full confirmation of this trend would likely come once the DeFi sector overtakes Ethereum’s performance.
AMBCrypto further analyzed which DeFi tokens could benefit most from this rally.
Watch these DeFi tokens
While the broader DeFi sector saw a modest 1.06% change according to CoinMarketCap, some tokens are already outperforming. At press time, the total DeFi market capitalization stood at $312.57 billion, representing a 2.32% increase.
To identify leading contenders, AMBCrypto examined the top three performing DeFi assets over the past 90 days, based on the Altseason Index.
Source: CoinMarketCap
The data revealed three standout tokens: Hyperliquid [HYPE], DeepBook Protocol [DEEP], and Aerodrome Finance [AERO], which are up 180%, 137%, and 132% respectively.
These tokens posted impressive gains during a period of low market activity, suggesting they may continue to lead the DeFi rally in the coming weeks.
Source: TradingView
Hyperliquid’s outlook remains bullish, though the Fibonacci levels suggest a likely short-term decline to the support zone at $42.628.
From that level, the token may resume its upward trajectory and attempt to break past its previous all-time high.
Source: TradingView
DEEP is showing a familiar fractal pattern. In the last three instances where the altcoin hit a higher high, it first faced rejection at a key Fibonacci resistance before continuing its upward move.
At press time, the chart showed that DEEP has been rejected at the $0.20569 level. If the pattern repeats, the token could pull back briefly before breaking above resistance to target $0.255.
Source: TradingView
AERO remained bullish, but a brief dip may be on the cards. The token could retrace to the middle band (black line), where bullish orders are likely to accumulate.
If this occurs, AERO could break out of its current channel altogether.
