AI and DeFi Thrive in July – Which Tokens Led the Charge?

Key Takeaways

• Artificial Intelligence (AI) tokens performed best in July.
• Decentralized Finance (DeFi) also held its own, continuing its robust Q2 performance.
• Which were the best performers in these two categories?

July was a pivotal month for the cryptocurrency market, marked by a significant uptrend that began on July 5. Bitcoin (BTC) led the charge, rebounding from its early July lows to post a 25% gain.

However, not all tokens could ride the wave of momentum, with several categories struggling to make headway and some even falling back to their July lows.

Amidst the mixed results, two areas stood out for their impressive performance: Artificial Intelligence (AI) and Decentralized Finance (DeFi) tokens. AI tokens, in particular, saw notable gains, with many increasing by double digits. With that in mind, let’s dive into the cryptocurrency market’s July performance, with a focus on the top-performing AI and DeFi tokens.

AI and DeFI Lead the Way

Only three of the eight outlined categories have performed positively in July. They are:

• AI tokens led with a 12.44% increase
• DeFi tokens followed with a 6.52% increase
• Memecoins trailed with 2.27% increase.

It is worth mentioning that the DeFi category was also the second-best performer in the second quarter, trailing only Layer-1 solutions. The other five categories have declined between 1 and 18%.

The Cosmos Ecosystem, Layer-1s, and gaming tokens declined by less than 4%. However, Ethereum Betas (orange) and Liquid Staking Solutions (blue) were the worst performers in July, falling by 9% and 18%, respectively.

Next, we will look at the best performers in the two best-performing categories: AI tokens and Memecoins.

Who is Leading the Way in Artificial Intelligence?

The clear standout in the AI category is TAO, which has increased by 31% (blue). It is the only one of the five tokens from the AI basket that has posted a positive performance. Besides TAO, most AI tokens generally have not performed that well. TAO’s significant price increase is dragging the basket up.

Since March, the TAO had been trending downward beneath a key resistance line. However, its bounce on July 5 marked the beginning of a robust upward movement, ultimately leading to a breakout on July 17.

The surge propelled TAO  toward the $350 resistance zone, where it encountered stiff resistance and failed to break through. Instead, the price suffered a series of consecutive rejections (highlighted by black icons).

Although technical indicators initially supported the breakout, they have begun to exhibit signs of weakness. During the breakout, the Relative Strength Index (RSI) climbed above 50, and the Moving Average Convergence Divergence (MACD) indicator rose above 0.

However, the RSI has since retreated back toward 50, and the MACD has executed a bearish crossover (marked by a black circle), casting doubt on the sustainability of the upward momentum.

As a result, the TAO price may revisit the $250 resistance trend line and validate it as support. Then, the trend depends on whether the TAO price bounces and returns to the $250 resistance or breaks down and declines toward $200.

Who are the Top Gainers in DeFi?

In the DeFi category, AAVE and COMP lead the pack with 10 and 7% increases, respectively. The three other cryptocurrencies in the basket, namely SNX, SUSHI, and UNI, fell by 13% to 19%.

Both AAVE and COMP have broken out from their descending resistance trend lines. Looking closely, AAVE attempted to move above its main resistance area at $108 but was rejected (black icon). If it does, it can increase toward its yearly high of $150. Due to the lack of overhead resistance, it is possible that it can quickly surge to this level, granted it closes above $109 first.

On the other hand, COMP has yet to begin an upward movement despite breaking out and remains close to its pre-breakout level. COMP also attempts to move above the $53 resistance area. But, unlike AAVE, even a breakout from this level will likely not trigger a rapid increase toward the yearly high since there is intermediate resistance at $70.

DeFi Can Outperform AI in August

While AI tokens led in July, their performance is heavily influenced by TAO’s 30% price increase. In addition, TAO’s future outlook is unclear. In contrast, AAVE and COMP, the two best performers in the DeFi category, display bullish potential, suggesting they can potentially outperform AI tokens in August.