DeFi Tokens to Keep an Eye on in July

Key Insights:

  • Decentralized Finance (DeFi) coins found some investor interest in June, albeit briefly.
  • Amidst the broad-based crypto sell-off, buying opportunities may present themselves at current levels.
  • With the DeFi space likely to come out stronger, once the crypto winter thaws, we consider Algorand (ALGO), Near Protocol (NEAR), and Tezos (XTZ).

In June, the total crypto market cap was down by $458 billion to a lowly $835 billion. Hopes of bottoming and an end to the crypto winter ended as fears of a global recession hit riskier assets. DeFi coins tracked the broader market into the deep red.

The NASDAQ 100 had a woeful first half of the year (H12022), tumbling by 30%.

The crypto market barometer, Bitcoin (BTC) was down 41% in June alone and down 60% for H12022.

Things were no better for DeFi coins, which tracked the broader crypto market into the red through H12022.

Total Value Locked Versus Coin Price Movements Diverge in H12022

According to Defi Llama, the total value locked (TVL) fell by 71% in H12022 to a lowly $71 billion. For June alone, the TVL fell by 37%.

TVL 300622 Defi Llama

With the DeFi space succumbing to market forces, Algorand (ALGO), Near (NEAR), and Tezos (XTZ) all saw sizeable declines in their respective TVLs in the month of June.

In the first half of 2022, Near Protocol saw its TVL rise by 126%, while ALGO and XTZ saw losses of 28% and 62%, respectively.

The table below shows coin performance and TVL movements.

The figures above reveal a marked difference between price and TVL movements for H12022, while the losses for June are more aligned.

Improving market conditions would support a price recovery to align more with the total value locked movements through H12022.

Based on these figures, the Near Protocol would have the most to gain from the chosen three.

For each coin, there are key levels to consider for the month ahead, however, which could present buying opportunities.

Algorand (ALGO)

As of June 30, 2022, ALGO stood at $0.2993. A bearish end to June saw ALGO fall back to sub-$0.30.

Down by 82% year to date, a move through the June high of $0.4313 would give ALGO a free run at the May high of $0.7842.

ALGO would need to avoid the current year low of $0.2749 to support the beginnings of a recovery.

However, market conditions will need to materially improve for ALGO to test resistance at the June high. An upward trend in total value locked would provide support, with ALGO on the radar ahead of the FIFA World Cup 2022.

In May, FIFA announced Algorand as an official partner of the 2022 World Cup.

ALGO 010722 Daily Chart

Near Protocol (NEAR)

As of June 30, NEAR stood at $3.25. Tracking the broader market, NEAR fell back towards the current year low of $2.88 before steadying.

Down 78% year to date, a move through the June high of $5.98 would give NEAR a free run at the May high of $13.17.

NEAR would need to avoid the current year low of $2.88 to support a move away from the June low.

However, market risk sentiment will need to improve for NEAR to revisit $5.00. An upward trend in total value locked would provide support. The first half of the year TVL gain makes NEAR an attractive option should market conditions improve.

NEAR 010722 Daily Chart

Tezos (XTZ)

As of June 30, XTZ stood at $1.38. Aligned with the broader market, XTZ fell back to sub-$1.40 in a bearish end to the second quarter.

Down 68% year to date, a move through the June high of $2.35 would support a run at the May high of $2.88 to test resistance at $3.00.

However, XTZ will need to avoid the current year low of $1.19 to support the start of a recovery.

While we can expect total value locked trends to influence, the crypto market sentiment would need to improve for XTZ to return to $2.00.

Tezos is on the map following last month’s Tether announcement.

TEZOS 010722 Daily Chart

In June, Tether announced the launch of USDT on the Tezos blockchain.

Tether CTO Paolo Ardoino said,

“We’re excited to launch USDT on Tezos, offering its growing and vibrant community access to the most liquid, stable, and trusted stablecoin in the digital token space.”

Ardoino added,

“Tezos is coming fast onto the scene and we believe that this integration will be essential to its long-term growth.”

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