DeFi tokens, including Hyperliquid’s HYPE, have surged by 70% in the past week, reflecting growing interest in projects with strong fundamentals as capital allocators remain cautious amid broader market uncertainties.
On Tuesday, Cardano’s ADA and XRP saw the most significant losses among major cryptocurrencies, as traders closely monitor the upcoming Federal Reserve (FOMC) meeting. While rates are expected to remain unchanged, market participants are keen to hear Federal Reserve Chairman Jerome Powell’s comments, which could provide guidance on future monetary policy and influence market positioning.
Bitcoin (BTC) held steady above $94,000 after a brief dip below that level on Sunday, continuing its recent trend of price stability. In contrast, ADA experienced a nearly 4% decline, and XRP followed with a similar drop. Ethereum (ETH) saw a modest decrease of nearly 1%, while Binance Coin (BNB) rose by 1.3%. Dogecoin (DOGE), on the other hand, dropped by 2% in the last 24 hours.
The broad-based CoinDesk 20 (CD20) index, which tracks the largest cryptocurrencies by market capitalization, fell by just over 1.8%.
In a notable shift, some DeFi tokens such as AAVE, Curve’s CRV, and Hyperliquid’s HYPE have gained traction over the past week, suggesting a renewed interest in projects with solid utility and yield mechanisms. This movement signals a pivot away from memecoins, which have recently fallen out of favor.
“As interest in memecoins wanes, traders are turning towards projects with stronger fundamentals and sustainable tokenomics,” said Kay Lu, CEO of HashKey Eco Labs, in a Telegram message to CoinDesk. “DeFi ecosystems are benefitting from this shift, especially as Bitcoin’s volatility remains low and macroeconomic uncertainties persist. We’re hopeful this trend will continue as crypto serves as a hedge against economic instability.”
HYPE led the charge among the top 100 tokens, gaining an impressive 72% in the past week. AAVE and CRV also saw significant increases, rising by as much as 40%.
Focus on Powell’s Comments
Traders across both the crypto and traditional finance sectors are closely monitoring this week’s FOMC interest rate decision. Consensus expectations suggest that the Fed will pause any rate hikes, but concerns around inflation, tariffs, and ongoing U.S.-China trade tensions are keeping many market participants on edge.
“We don’t expect the FOMC to trigger a major move in markets,” said Augustine Fan, Head of Insights at SignalPlus, via Telegram. “The market’s direction is a coin flip. Crypto will likely take cues from broader earnings growth and how the economy reacts to recent trade policy developments.”
Recent stock market strength indicates that investors are pricing in only a mild recession risk, estimated at around 8%, based on historical drawdown models. This contrasts with more bearish signals from the bond market and broader macroeconomic forecasts, Fan added.
Last week, President Trump confirmed that there were no immediate plans for talks with China, dampening hopes for a breakthrough in U.S.-China trade negotiations. However, the possibility of separate trade agreements has kept risk sentiment relatively stable, as reported earlier this week.
