Bitcoin Is Up, DeFi Is Recovering, So Why Doesn’t This Look Like a Bull Market Yet?

Bitcoin and Ethereum have recovered much of their July losses. Bitcoin rose about 38% from its July low to trade near $83,020 in late September. Ethereum recovered from around $1,610 to roughly $2,665 over the same period. Both assets remained below their January levels, with Bitcoin about 7% lower and Ethereum about 11% lower.

Technical indicators have made the recovery easier to read as a bullish setup. Bitcoin is trading above its 50-day and 200-day moving averages, and CoinGecko classifies it as being in a new bull cycle under its 200-day moving-average methodology. Those readings still leave open whether the move is broad enough to last.

Evan Ceolini, CEO of crypto exchange aggregator SwapSpace, takes a different route in a new analysis. Instead of repeating the chart case for Bitcoin, he looks at stablecoin market caps, DEX volume, DeFi lending, native-token TVL, and the way activity is distributed across chains.

The data gives a mixed picture. Crypto is healthier than it was in July, yet capital and user activity have not expanded evenly enough to make a broad bull-market case.

Stablecoin Liquidity Lags as DEX Activity Improves

Stablecoins remain one of the less conclusive signals in the recovery. The market caps of USDT and USDC, the two largest fiat-backed stablecoins, have recovered from their summer lows but remain below their 2026 highs. Their combined market cap reached roughly $270 billion in the spring, fell during the summer, and stood at $258.15 billion on September 30.

The picture is different for decentralized trading activity. Average daily DEX volume rose from $6.69 billion in July to $10.39 billion during the first 28 days of September, a 55% increase. Uniswap’s daily volume also rose from $1.40 billion in early July to $2.32 billion in late September.

The recovery in DEX activity has not been completely consistent. The last daily reading in the dataset was $8.52 billion, below the $10.25 billion recorded on September 1. The increase is meaningful, but it has not yet developed into a sustained upward trend.

Together, the two indicators point to a mixed recovery. DEX activity has improved from the summer, while the market caps of USDT and USDC remain below their 2026 highs. For Ceolini, that gap is important: stronger trading activity has returned, but the underlying liquidity base has not expanded at the same pace.

DeFi Lending Has Recovered, but Not Fully

Aave, the largest lending protocol by TVL according to DeFiLlama’s rankings, fell from $30.48 billion at the start of the year to $11.63 billion in July, then recovered to $17.93 billion in late September. That was still about 41% below the January level, and the gain since the start of September was modest.

Ceolini treats lending as a useful test because borrowing and collateral activity tend to deepen when users are willing to take sustained risk. Aave’s recovery shows interest returning to DeFi. It does not show the earlier capital base being rebuilt.

TVL needs to be read carefully here. Higher ETH and other collateral prices can raise a protocol’s dollar value without the same increase in fresh deposits. Borrowing, repayments, and continued use give a clearer view of whether capital is staying on-chain.

For the recovery to look more durable, lending activity would need to hold after the initial price-driven attention fades. The same applies to DEX volume, which is higher than in July but remains below earlier highs.

The Recovery Is Concentrated, Not Broad

Another challenge is separating price effects from underlying activity. Dollar-denominated TVL can increase when the token used as collateral rises in value, even if the amount of capital committed to an application has not changed.

Ceolini’s analysis compares TVL in the relevant native token and indexes each chain to its early-December 2025 level. By that measure, Base was the clear exception, finishing about 48% above its baseline. Ethereum, Solana, BNB Chain, and Arbitrum all remained below theirs, with Arbitrum down the most.

The comparison shows that the recovery is concentrated in a smaller number of places rather than spread across major chains. A broad expansion would be easier to argue if deposits, borrowing, transactions, fees, and users kept rising across more of the market.

The same distinction matters for market sentiment. Higher token prices can make the existing pool of capital look larger. Native-token measures help show whether users are putting more assets to work.

What Is Needed for a Bull Market to Be Confirmed

There is plenty in the market to support a more optimistic view. Compared with the summer, crypto is clearly healthier: Bitcoin and Ethereum have recovered, DEX volume has increased, and Aave has regained part of its lost TVL.

The remaining uncertainty is whether that recovery has developed enough momentum of its own. A stronger bull-market case would mean stablecoin market caps moving back above their previous highs, activity broadening across chains and applications, and capital and usage remaining strong even after the initial boost from higher prices and volatility begins to fade.

That is where Ceolini’s analysis draws the line between a rebound and a more durable expansion. The rally has already brought activity back. The next phase will show whether the market can retain capital and users without relying primarily on further price gains.