On December 23, Monday, Aave, the largest lending protocol in the crypto realm, experienced a notable price rebound for the second consecutive day. This upward movement erased some of the losses from the previous week. The token climbed to $341, marking a 25% increase from its lowest point last week, pushing its market cap over $5 billion.
The rally wasn’t spurred by any AAVE – specific news. Instead, it seemed to ride on the coattails of a broader rebound among DeFi tokens. For instance, Curve DAO Token rose by 10%, Raydium increased by 5%, and other leading DeFi tokens like Chainlink and Lido DAO also showed upward momentum.
AAVE’s strong fundamentals further buttressed its performance. As the second – largest player in the DeFi industry, it manages over $19.6 billion in assets across multiple chains, including Ethereum, Polygon, and Arbitrum.
A significant trend is the continuous decline in AAVE’s exchange balances. The total tokens held on exchanges dropped to 5.51 million, a 2.27% decrease from the previous week. In the crypto market, a reduction in exchange balances is often seen as a positive sign, indicating that investors are holding onto their tokens rather than selling.
Nansen data revealed heightened activity among smart money investors. The number of smart money AAVE holders has risen to nearly 50, up from fewer than 30 in June. Their balances now exceed 430,000 tokens, up from a year – to – date low of under 340,000. Such accumulation is typically regarded as a bullish signal for a cryptocurrency.
Donald Trump’s World Liberty Financial has emerged as a major buyer of the AAVE token. Owning over 6,000 coins worth over $2 million, AAVE is the fourth – largest component of its portfolio, following Ethereum, Bitcoin, and USDC. The company also intends to build its DeFi network on top of AAVE’s platform.
From a technical perspective, the AAVE token appears to have more room for upward movement in the coming days. On December 20, as cryptocurrencies declined, the coin formed a hammer candlestick chart pattern. A hammer, which forms during a downtrend, consists of a long lower shadow and a small body.
Moreover, AAVE has found support at its 50 – day moving average and is approaching the weak, stop, & reverse level of the Murrey Math Lines. This indicates that the token may continue its ascent, with the next key resistance level to monitor being $375.
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