Crypto activity recovered in July, new liquidity still limited

July remained a stagnant month for crypto, where BTC dominated altcoins and tokens. Despite this, DeFi activity and other on-chain transactions showed signs of recovery. 

 According to Cryptorank, Aave still dominates lending, with $11B in active loans, and a 46.2% market share. Around two-thirds of the loans are held on Aave and Morpho. 

Some of the recovery in July is due to the positive performance of ETH. The token closed with a 20.32% net gain for the month, while BTC gained 9.03% for the same period. BTC still outperformed most altcoins and tokens. 

Liquidity allocation shows caution despite robust crypto activity

While activity is recovering, the crypto market moves without new sources of liquidity. This includes stablecoin minting, which has been limited in the past month. The total supply of stablecoins contracted by 0.6% in July, down to around $312B.

Inflows from ETF trading also remained weak, showing no outsider capital was allocated to crypto. Unlike 2025, inflows from treasury companies have frozen to a halt, even for BTC. SOL and ETH treasuries have also abandoned their aggressive expansion. 

As Cryptopolitan reported, 2026 has been a year of clearing out non-viable projects, while moving liquidity to the few remaining winners.  

At the same time, DEX trading expanded to over $169B in total volumes for July, up by over 10% in the past week. Perpetual futures volumes continued to grow, adding over 12% in the last week of July. Overall open interest has been growing in 2026, rising to over $15B based on DeFi Llama data. 

Robinhood also competed to become a part of the general crypto recovery, becoming one of the most active chains for the past month. 

Crypto activity becomes more aggressive

In July, crypto activity did not have a boost from easy liquidity, but continued to become more aggressive. 

Stablecoin velocity remained elevated in the past month, as some of the liquidity shifted. Stablecoins flowed out of Arbitrum and Optimism, but remained active on Solana, Base, and Ethereum. 

Solana retained the highest stablecoin velocity in the past month, on a mix of meme token and tokenized securities trading. 

Whales are also taking up aggressive leveraged positions on perpetual futures markets, recently shifting to trading equities. Even former crypto insider whales have switched to directional bets on the S&P500 and stocks like SK Hynix (SKHX).

The recently rising activity is not a risk-on signal, as liquidity remains cautions. Rather, it is a short-term risky allocation, seeking short-term gains with highly leveraged positions.