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After a week of great volatility for the broader Cryptocurrency market, some sectors appear to be looking for consolidation. Among them is decentralized finance (DeFi) whose protocols are beginning to show new green shoots in recent hours. Despite this, it is still early to talk about recovery in the strict sense of the word.
As DeFiLlama data shows, the decline in total value locked (TVL) in this sector slowed on Thursday. Although there is no significant increase in this meter, at least the nervous withdrawals stopped after a short but intense period.
This indicates that investors in this ecosystem seem more committed to the long term than speculative pickups. Unlike this relative stability of DeFi, other sectors based on quick profits such as memecoins plummeted dramatically. This reality extended practically to the entire set of alternative currencies.
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Although DeFi protocol tokens also suffered from the shakeout, the environment seems more inclined towards recovery. At the time of writing, the global TVL of decentralized finance amounts to $125.58 billion. The lowest point of the week was $124.18, reflecting an improvement of +1.13%.
The DeFi sector seems to stabilize in recent hours. Source: DeFiLlama
Green numbers return to DeFi protocols
Over the past 24 hours, improvement in almost all major decentralized applications is evident. As reflected in the aforementioned data portal, some protocols show increases close to double digits in 24 hours. In the weekly period, the negative numbers still remain, suggesting that the sector is still far from the performance prior to the shock that originated on Wednesday.
For example, the Lido protocol shows +6.5% in 24 hours, but in the last 7 days it shows -11.6%. This reality remains almost identical among the 5 largest decentralized finance protocols. As already mentioned, the important thing about these numbers is that they seem to create an environment of consolidation.
If the improvement continues, investors are likely to feel that the calm after the storm is approaching. The latter could be crucial for the recovery of DeFi in the coming days. On the other hand, when it comes to dApp tokens, they are in a similar situation. The Uniswap token, to name one, shows +8.7% in 24 hours, but in 7 days it loses more than 22%.
Volatility is likely to remain in the crypto world over the next week. In any case, investors seem to be waiting for the reaction of Trump, Musk or others to Powell’s statements.
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