AAVE Price Forecast: Can the Token Reach Its All-Time High?

AAVE, the native token of the Aave lending and borrowing protocol, has declined for the second consecutive week, reflecting the performance of most altcoins amidst ongoing tariff risks. The token’s price fell to a low of $196.4, its lowest level since November 25, and is currently 50% below its highest level this year.

Signs of Increased Accumulation and Protocol Strength

Despite the recent decline, AAVE has several catalysts that could push it towards its all-time high of $666, representing a 170% increase from its current level. One positive indicator is the significant drop in exchange balances, which suggests that investors are holding their tokens rather than selling. According to Coinglass data, AAVE’s balances on exchanges have crashed to their lowest level in years, down to 2.2 million from 2.67 million in December.

This decrease in exchange balances is a positive sign, as it indicates that investors are accumulating the token rather than selling. In contrast, rising balances often signal selling pressure, as investors move their holdings from self-custody to exchanges to sell.

AAVE remains the largest lending and borrowing protocol in the crypto industry, with approximately $20 billion in assets and annualized fees exceeding $721 million. The protocol has generated over $103 million in fees this year, according to TokenTerminal data.

Successful Liquidations and Network Expansion

AAVE successfully handled over $201 million in liquidations on Monday as cryptocurrency prices dropped, without accruing any bad debt. The total bad debt fell by 2.7% despite the substantial liquidations.

The AAVE network is also expanding, with over 440 million USDS stablecoins deposited into the network. Additionally, AAVE has moved to Base, the blockchain network owned by Coinbase, and a vote is underway to activate it on Linea.

AAVE Price Forecast and Technical Indicators

AAVE’s price chart shows strong technical indicators that suggest a potential rally in the coming months. The token has formed a cup and handle chart pattern, with the upper boundary at $400. The recent pullback is part of the handle formation, which is typically followed by a strong rebound.

AAVE has also formed a small hammer candlestick pattern, signaling that the handle phase may be ending, which could lead to further gains. The depth of the cup is about 90%, and measuring the same distance from the upper boundary suggests that the coin could surge to $765 in the long term, a 200% increase from its current level.

Investing in cryptocurrencies carries risks, and it’s essential to conduct thorough research and consider your financial goals before making any investment decisions.

For more news and updates on the cryptocurrency market, visit Global Crypto News.

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Tips for investors:

  • Conduct thorough research on the cryptocurrency market and AAVE’s protocol.
  • Consider your financial goals and risk tolerance before investing.
  • Stay up-to-date with market news and developments to make informed investment decisions.
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