Bitcoin Could Rally—But I Still Think We See Lower BTC Prices in 2026
- Kevin- DADS DeFi Space
- 2 days ago
- 11 min read
DADS DeFi Space Market Report | August 2026
It has been a little over two weeks since my last full market report.
Normally I try to put one of these together every week, but between real life, teaching, managing my own portfolio, researching DeFi, and spending a lot of time digging into what is happening with tokenized stocks and liquidity on Robinhood Chain, this one took a little longer.
Honestly, that may have been a good thing.
Because instead of reacting to every candle and headline, we now have a couple of weeks of information to work with—and the market is giving us a pretty interesting picture.
Bitcoin defended the low-$62,000 area and has worked its way back toward the mid-$64,000s. Oil prices have fallen. Traditional equities have remained strong. Institutional money continues moving into Bitcoin and Ethereum ETFs. Some of the excess leverage has been flushed out of crypto.
At the same time, Ethereum still isn't showing me the kind of leadership I want to see. Altcoins are dealing with major token unlocks. The Federal Reserve isn't exactly waving the all-clear flag. DeFi activity has cooled. And Bitcoin still hasn't convincingly broken the resistance sitting above it.
So where does that leave me?
Probably somewhere between the bulls screaming that the bottom is in and the bears waiting for Bitcoin to fall off a cliff.
I think Bitcoin can go higher from here in the short term.
But I still believe there is a reasonable chance we see lower Bitcoin prices before 2026 is finished.
Those two ideas aren't contradictory.
And as a liquidity provider, I don't necessarily need Bitcoin to immediately pick a direction.
Sometimes the range itself is the opportunity. Range bound asset are a LP providers dream, but a traders nightmare.
The Big Picture: Bitcoin Could Rally, But I'm Not Calling the All-Clear
Bitcoin spent the last couple of weeks defending an area I've been paying close attention to around $62,200–$62,400.
That's important.
The market had plenty of opportunities to lose that area, and buyers continued showing up.
Bitcoin has since worked its way back toward approximately $64,000, leaving us with a pretty clear short-term decision zone.
The next area I care about is roughly:
$64,800–$65,500.
Aconvincing move through there could open the door for Bitcoin to make another run toward $68,000–$70,000.
I wouldn't be surprised to see it.
But here's the distinction I want to make:
A Bitcoin rally does not automatically change my bigger 2026 thesis.
I can trade or position around the market in front of me while still believing there may be another significant correction later this year.
That's one of the mistakes I think investors make.
We feel like we have to choose a team.
Bull or bear.
Up or down.
But markets don't work on our timelines.
Bitcoin could rally several thousand dollars and still eventually trade below today's prices.
Or Bitcoin could lose support first and accelerate that process.
I don't need to know which happens first. I need a plan for both.
Macro Matters Again: Oil, Inflation, Jobs and the Fed | BTC Could Go Lower
One of the biggest changes over the past couple of weeks has happened outside crypto.
Oil prices declined more than 4% as geopolitical tensions around the Strait of Hormuz showed signs of easing.
That's important because energy prices feed directly and indirectly into inflation.
Lower energy costs can relieve some inflationary pressure, which can help Treasury yields and potentially improve financial conditions.
Traditional markets certainly liked what they saw.
Equities remained extremely strong while crypto continued struggling to generate the same enthusiasm.
And that's something I'm watching closely.
If stocks are making new highs while Bitcoin and especially altcoins remain relatively weak, I want to know why.
Is crypto simply lagging?
Or is crypto telling us something traditional markets aren't pricing in yet?
I don't know the answer yet.
That's why I'm watching the data instead of forcing the conclusion.
The Fed Is Still a Problem
The July Federal Reserve meeting didn't exactly give risk assets a green light.
Rates were held in the 3.50%–3.75% range, but three voting regional Fed presidents reportedly dissented and preferred another 25-basis-point increase.
That matters.
The market may want easier monetary policy, but inflation has not disappeared from the Fed's decision-making process.
At the same time, softer employment data complicates things.
And that's why the upcoming inflation and jobs numbers remain so important.
A weakening labor market combined with cooling inflation could give the Fed considerably more room.
Sticky inflation—or another inflationary shock—could create the opposite problem.
For crypto investors, these aren't boring economic reports.
They affect:
rates → liquidity → risk appetite → Bitcoin → Ethereum → altcoins.
That's why I continue paying attention to macro even though I'm primarily a crypto and DeFi investor.
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Strategy Sold Bitcoin—Should We Care?
Another headline worth watching involved Strategy.
According to the research gathered for this report, wallets associated with Strategy sold approximately 1,638 BTC worth around $105 million while the company expanded its cash reserves to roughly $4 billion. Additional Bitcoin was also moved between internal cold-storage wallets.
I don't interpret that headline as:
“Strategy is bearish on Bitcoin.”
That's way too simplistic.
Companies manage liquidity.
They manage treasury requirements.
They move assets between wallets.
And a sale doesn't necessarily mean the underlying long-term thesis has changed.
But when one of the world's most closely watched corporate Bitcoin holders moves or sells Bitcoin, I'm paying attention.
The important question isn't whether we can turn it into a scary headline.
It's whether this becomes a pattern.
One transaction is information.
A sustained change in treasury behavior would be something more significant.
Institutional Money Is Still Showing Up
While retail sentiment remains pretty miserable, institutional flows tell a somewhat different story.
Bitcoin ETFs recovered from a sizable July 31 outflow and subsequently recorded several sessions of positive flows.
Ethereum ETFs also continued attracting capital during July despite ETH's weak price performance.
I find that divergence interesting.
Retail sentiment remains in fear.
Bitcoin is stuck in a range.
Ethereum is struggling.
Altcoins aren't exactly inspiring confidence.
Yet institutional allocators continue buying exposure.
That doesn't guarantee higher prices.
Institutions can be wrong too.
But it tells me something important:
large capital hasn't abandoned this market.
And that matters when I'm thinking beyond tomorrow's candle.
Ethereum: I'm Still Waiting
Ethereum remains one of the most important pieces of my broader market framework.
BTC can rally without ETH.
But if we're talking about a real expansion in crypto risk appetite and eventually a meaningful altcoin rotation, I want Ethereum participating.
Right now, I'm still waiting.
ETH has been consolidating around the upper-$1,800s to low-$1,900s, with roughly $1,950–$2,000 representing an important area overhead.
Institutional accumulation through ETH ETFs has continued.
That's encouraging.
But price still isn't giving me the leadership signal I want.
And this is why I keep repeating:
Bitcoin going up does not automatically mean altseason.
For me, the progression matters.
Bitcoin strength → Ethereum participation → broader altcoin participation.
Until that starts developing more convincingly, I'm going to remain selective with altcoin exposure.
Altcoins Have Another Problem: Supply
There is another reason I'm not blindly chasing alts right now.
Token unlocks.
More than $850 million in cliff unlocks were identified across the August calendar in the research for this report.
That includes major releases involving names such as:
Wormhole, Aptos, Arbitrum, Sandbox, Avalanche and others.
This is one of those topics investors tend to ignore when they're excited about a project.
You can love the technology.
You can love the team.
You can love the narrative.
You can even be correct about long-term adoption.
But price still comes down to supply and demand.
If significant new supply continually enters circulation, somebody has to absorb it.
That's why I look beyond market cap.
I want to understand:
How much supply exists?
How much is circulating?
Who owns the locked tokens?
When do they unlock?
And where is the actual demand coming from?
A great project can still be a terrible trade at the wrong valuation or during the wrong supply cycle.
Solana Continues to Get My Attention
One area showing relative strength underneath the broader market has been Solana's DeFi ecosystem.
Kamino has continued developing into a major lending and credit venue on Solana, with the research for this report showing billions in TVL across its ecosystem.
That doesn't mean I'm suddenly buying everything connected to Solana.
What interests me is the usage.
I'm much more interested in networks where people are actually borrowing, lending, trading and providing liquidity than I am in a token trending on X for 48 hours.
Activity matters.
Volume matters.
Liquidity matters.
Those are things we can measure.
Hyperliquid, HYPE and the Growth of Onchain Trading
Hyperliquid continues to be another ecosystem worth watching.
The platform has been expanding beyond perpetual futures and into permissionless outcome markets, while whale positioning remains significant.
At the same time, the report identified some declining protocol revenue and token movements involving HyperLabs.
That's exactly the type of setup where I don't want to reduce the analysis to:
Bullish HYPE.
or
Bearish HYPE.
The bigger story is that decentralized trading infrastructure continues becoming more sophisticated.
Perpetuals, prediction markets and other financial products are increasingly moving onchain.
Whether every token capturing that narrative deserves its valuation is an entirely different question.
TAO and Decentralized AI
I'm also continuing to watch Bittensor.
The interesting part of TAO for me isn't simply the AI narrative.
It's whether the subnets are actually producing useful decentralized machine-learning, inference and quantitative services.
Emission allocation continues shifting between subnets based on network participation and validator evaluation.
That's something I continue monitoring.
But just like every other narrative:
AI + crypto does not automatically equal a good investment.
I want usage.
I want measurable activity.
And I want to understand where the value actually accrues.
DeFi Activity Is Down—But DeFi Isn't Dead
One number in this report jumped out at me:
Overall DeFi activity was reported down approximately 38.7%.
That sounds terrible in isolation.
But then look underneath it.
USDC infrastructure continues expanding.
New lending markets continue developing.
Real-world assets continue moving onchain.
Institutional stablecoin adoption continues.
Tokenized Treasuries continue growing.
Solana lending continues expanding.
Base continues building.
And tokenized stocks are beginning to create entirely new types of liquidity markets.
So I think we need to separate two things:
speculative activity
from
financial infrastructure.
Speculation can cool while infrastructure continues getting stronger.
That's actually one of the more interesting things happening in crypto right now.
The Quiet Story: Stablecoins, RWAs and Tokenization
Some of the biggest developments in crypto aren't happening in meme coins.
They're happening in boring financial plumbing.
Stablecoins.
Treasuries.
Private credit.
Tokenized assets.
Settlement infrastructure.
USDC reserves remain enormous across dozens of chains.
RLUSD continues expanding.
Tokenized Treasury products are establishing onchain benchmarks.
And we're now watching stocks and other traditional assets move onto blockchain infrastructure.
I've personally been spending a lot of research time in this area.
Robinhood Chain and the emerging tokenized-stock liquidity markets are especially interesting to me.
Not because I think every tokenized stock LP is automatically a great investment.
Far from it.
Some of these markets are extremely early.
Liquidity can be thin.
APR can be misleading.
And risk can be substantial.
But the larger idea matters:
Traditional financial assets are beginning to interact directly with DeFi infrastructure.
I think that's worth paying attention to.
And This Is Where Being a Liquidity Provider Changes the Conversation
Here's where my perspective may be different from someone who only buys spot crypto.
A sideways market isn't necessarily a useless market.
In fact:
Ranging markets can be very interesting environments for liquidity providers.
If Bitcoin, Ethereum or another asset moves back and forth through a range with meaningful trading volume, concentrated liquidity positions can potentially collect fees while that activity occurs.
That doesn't mean:
Sideways market = free money.
Far from it.
You still have to understand:
the assets,
the pair,
the range,
the volume,
the fee tier,
the liquidity,
impermanent loss or divergence,
and what happens if price violently leaves your range.
That's why I don't start my LP research with:
“Which pool has the highest APR?”
I start with:
“Do I actually want to own these assets?”
Then:
“Where is the yield coming from?”
And finally:
“What happens to this position if I'm wrong?”
That framework matters much more to me than an APR screenshot.
The Market Can Pay You to Wait
This is probably the biggest difference between how I look at today's market and how I looked at crypto several years ago.
I don't necessarily need Bitcoin to pump tomorrow.
If the market continues ranging and there is healthy trading volume, I can explore ways to generate fees through liquidity.
If I want less directional exposure, I can examine stablecoin lending.
If I see an emerging ecosystem worth studying, I can allocate a small experimental position.
And I can still maintain dry powder for the larger opportunity I believe could come later this year.
That's not passive.
It's portfolio management.
My Bigger Bitcoin Thesis Hasn't Changed
This brings us back to Bitcoin.
Could BTC reclaim $65,000?
Yes.
Could we see $68,000?
Yes.
Could we even push toward or above $70,000 before the larger correction I'm expecting?
Absolutely.
I'm not going to short every green candle simply because I believe lower prices could eventually come.
That's prediction overriding process.
Instead, I'm separating my timeframes.
Short term:
Bitcoin's structure improved by defending the low-$62Ks.
Intermediate:
A break above approximately $65K–$65.5K would strengthen the case for another move higher.
Bigger picture:
I still believe there is a reasonable chance Bitcoin trades at lower prices later in 2026.
That means I'm not interested in becoming overextended if we get another rally.
I'd rather have capital available if the larger opportunity develops.
Three Scenarios I'm Watching
Scenario 1 — Bitcoin Breaks Higher
BTC reclaims approximately $65K–$65.5K and holds it.
Then I'm watching:
$68K → $70K
But more importantly, I'm watching:
ETH/BTC.
Bitcoin dominance.
TOTAL3.
Spot volume.
ETF flows.
Funding.
Open interest.
Does the rest of crypto finally participate?
If Bitcoin pumps while everything else continues struggling, that's information.
Scenario 2 — The Range Continues
Bitcoin stays roughly between:
$62K and $65K.
Some traders will hate that.
As a liquidity provider?
I may be perfectly happy with it.
If volume remains healthy and I can structure positions around assets I actually want to own, continued chop can potentially generate fees while the larger market decides what comes next.
I'm not going to force a directional trade simply because Twitter is bored.
Scenario 3 — Bitcoin Loses Support
If the low-$62K area fails convincingly, then I start paying much more attention to:
$60K
and potentially:
$58K.
That's where capital preservation and dry powder become considerably more important.
And if that happens later this year at even lower levels?
That's where my longer-term accumulation plan becomes much more interesting.
What I'm Watching Next
Going into the next market cycle update, these are the things that matter most to me:
Bitcoin: Does $62K continue holding, and can BTC reclaim $65K?
Ethereum: Can ETH finally begin outperforming and provide leadership?
Macro: What are inflation, employment, oil and the Fed telling us?
Liquidity: Are ETF flows and stablecoin liquidity continuing to expand?
Altcoins: Are major token unlocks being absorbed?
DeFi: Is activity recovering, and where is actual volume generating sustainable fees?
Tokenization: What happens as more stocks, Treasuries and traditional financial assets move onchain?
LPs: Can the current range continue producing useful fee opportunities without taking unnecessary directional risk?
Those answers matter more to me than trying to guess tomorrow's candle.
Dad's Take
After spending the last couple of weeks looking at all of this, I don't think this is a market where I need to make some heroic prediction.
Bitcoin held support.
That's good.
Institutions are still participating.
That's good.
Macro conditions improved in a few areas.
Also good.
But ETH isn't leading.
Altcoins still have supply problems.
The Fed remains uncertain.
And Bitcoin hasn't broken the larger range.
So I'm going to continue doing what I've been doing:
manage the position in front of me.
I'll maintain exposure to assets I believe in.
I'll continue researching and deploying liquidity where the risk/reward makes sense.
I'll keep experimenting with emerging areas like tokenized assets using controlled capital.
I'll keep dry powder available.
And I'll adjust when the evidence changes.
Because I still think Bitcoin has a good chance of giving us lower prices later this year.
Maybe we rally first.
Maybe we don't.
Either way, I'm not interested in being perfectly right about the path.
I want to be prepared for the destination.
Process over prediction.
And in the meantime?
If the market wants to keep ranging...
I'll happily explore getting paid to wait.
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This content is for educational purposes only and is not financial advice. Nothing here is a recommendation to buy, sell or hold any cryptocurrency, token, stock, liquidity position or other financial asset. Crypto, DeFi, concentrated liquidity, tokenized assets and smart contracts involve substantial risk, including the possible loss of capital. APRs and yields are variable and are never guaranteed. Always do your own research and only risk capital you can afford to lose.
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