AAVE has seen an impressive 25% surge today, driven by growing optimism within the ecosystem and an increase in trading activity.
Aave (AAVE) reached an intraday high of $20 on May 269, a level not seen since February. With a rise of over 132% from its April low, AAVE is currently making a strong comeback.
This increase goes hand in hand with a significant increase in trading volume. Today, over $800 million worth of AAVE changed hands, making it the most active trading day since early March. This clearly points to renewed interest from traders in this promising crypto asset.
The open futures proposal for AAVE has risen to a record high of $569 million, reflecting strong demand from derivatives traders. In addition, there has been a positive funding rate for two weeks in a row, indicating that the majority of the market expects the price to continue to rise. Long-term traders are currently paying a premium to short traders.
Traders also seem excited about the progress of the GENIUS Act, which recently passed a key procedural vote in the U.S. Senate. This legislation proposes a regulatory framework for stablecoins, a key element for DeFi protocols like Aave. Given Aave’s reliance on stablecoins like USDC, DAI and its own GHO, this opportunity for regulatory clarity can strengthen institutional investor confidence and encourage greater participation.
AAVE’s rise is further bolstered by its position as a leading DeFi protocol, with over $40,7 billion in total capitalization recorded. This is up almost 40% from a month ago and far surpasses its competitor Lido, which has $23,3 billion. This growing capital is further translating into real revenue, with over $250 million in fees collected so far this year, making AAVE one of the most profitable protocols in the sector.
Technical indicators also reflect positive momentum, with daily active addresses up 57% in the past two days. Furthermore, social sentiment around AAVE has become more positive, indicating that market participants are bullish on the token’s short-term prospects.
On the daily chart, the Aroon Up indicator is at 100% while Aroon Down is at 0%. This indicates an overall bullish momentum. The Chaikin Money Flow Index is showing a value of 0,26, which means that more capital is flowing into the token. Furthermore, a golden cross seems to be in the making as the 50-day and 200-day moving averages are approaching each other — often a signal of a positive trend.
The token is approaching the 61.8% Fibonacci retracement level at $271,35. A clear breakout above this level could pave the way towards the 50% retracement level at $347,19, around 30% higher than current levels. Should a pullback occur, the crucial support lies around $226,45, which could form a solid bounce zone before the uptrend resumes.
At the time of writing, AAVE was trading around $267 per coin.
What caused the recent rise in AAVE?
The growing optimism within the ecosystem, along with an increase in trading activity, has led to the recent surge in AAVE.
How much AAVE was traded today?
More than $800 million worth of AAVE changed hands today, making it the most active trading day since early March.
What are the important levels to watch for AAVE?
Keep a close eye on the 61.8% Fibonacci level at $271,35 and the support around $226,45.