Aave, the decentralized finance (DeFi) lending protocol, has experienced a remarkable surge, extending its weekly rally to a staggering 37%. As of writing, AAVE is trading at $136, a significant increase from its recent lows. This surge has been accompanied by a 20% increase in trading volume over the past 24 hours, indicating growing market interest and buying activity.
Whales Fuel The Rally
The rally has been fueled in part by the actions of large investors, known as whales. These whales have been accumulating AAVE, with recent purchases totaling over $8 million. This influx of capital has provided a strong foundation for the ongoing price increase.
Crypto analyst Daan Crypto has expressed optimism about AAVE’s future, noting that the current price action suggests a potential breakout from a 2.5-year trading range. This sentiment is further supported by the token’s recent break above key resistance levels.
Technical Analysis Supports Bullish Outlook
A closer look at AAVE’s technical indicators reveals a bullish outlook. The token has successfully tested and held above the 0.618 Fibonacci level of $112, a significant support level. Additionally, AAVE has broken through the $130 resistance, setting the stage for a potential rally to the two-year high of $154.
AAVE‘s price chart also shows the formation of a double-bottom pattern, a bullish reversal signal often followed by a significant rally. The token has recently broken above the neckline of this pattern, further strengthening the bullish outlook.
The Relative Strength Index (RSI) currently stands at 74, indicating strong buying pressure. While the RSI is approaching overbought levels, there is still room for further gains before a potential correction. The Moving Average Convergence Divergence (MACD) is also providing bullish signals, with the MACD line above the signal line and the histogram bars expanding.
Also Read: DeFi Token AAVE Surges 50%, Outpacing The Market
Growing Demand and Open Interest
Data from Santiment shows a surge in the number of daily active AAVE addresses, suggesting increasing demand and market interest. Additionally, Coinglass data reveals a significant increase in AAVE’s Open Interest, reaching its highest level since 2021. This indicates a growing number of traders holding long positions on AAVE.
AAVE’s impressive rally, fueled by whale purchases and positive technical indicators, suggests a bullish outlook for the token. However, it’s important to exercise caution and conduct thorough research before making any investment decisions. The cryptocurrency market remains volatile, and prices can fluctuate rapidly.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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