Why Is Aave Up And How High Will It Go?

Aave is on its third day of significant increases. Fundamentals were significantly bullish during this period, as investors remained optimistic about its next price action. 

The total value locked reached a new milestone three days ago. AAVE TVL exceeded $40 billion three days ago. The ecosystem saw a massive hike in users’ deposits and increased demand for lending services. 

Data from DefiLlama shows that the TVL increase is the probable cause of the ongoing price surge. Between May 8 and 13, the ETH total value locked increased from $19.9 billion to $25 billion, and prices reacted with a more than 37% uptick. 

The trend repeats with a 17% hike in the last 72 hours. However, expansion to other blockchains plays a massive role in the uptrend. The Aave v3 deployment on Aptos on May 19 added fuel to the growing positive sentiment surrounding the cryptocurrency.

The move marked its first integration into a non-EVM layer 1 blockchain, opening it to over 2.8 million monthly users on the ecosystem. 

A new bill from the United States Senate buoys Aave’s most recent surge. The legislators moved to regulate digital assets using the Guiding and Establishing National Innovation for US Stablecoin. The act will help reshape the cryptocurrency landscape in the US.

Several cryptocurrencies have since reacted with notable improvements in price. The global cryptocurrency market cap has slightly recovered following the announcement, hitting $3.32 trillion. 

A Golden Cross Is Imminent 

The token’s notable increases triggered some reaction from indicators. Following the massive change in price trajectory, the 50-day moving average is on the uptrend. As the highlighted metric edges closer to the 200-day MA, it may revert the death cross that happened in March. 

The average directional index remains strong in its upward drive. It shows that the asset is seeing sustained momentum amid the slight declines a few days ago. The accumulation and distribution chart agrees with this reading, as it’s on the uptrend, indicating notable buying action in the last three days. 

Aave broke above several critical levels. The pivot point standard shows that the token is trading above the third pivot resistance. It broke the mark a few hours ago, surging to its highest value since February. It is worth noting that it hovered around the second pivot resistance for most of the previous week before its breakout. 

How High Will Aave Go?

The cryptocurrency may see further upward movement in the coming days. Based on previous price movements, it may hover around the PPS’ R3 before a breakout. The fourth pivot resistance is at $295. A flip of this critical will guarantee a surge above $300. 

However, other indicators are blaring warnings about an impending massive decline. Aave surged from $246 to $270 but faced massive rejection as selling pressure increased. It trades at $261 as the bulls failed to sustain the uptrend. Previous price trends suggest that the token may see further declines as the bulls are getting exhausted.

The relative strength index is currently at 74, indicating that the asset is overbought. Traditionally, this suggests that the uptrend may end in the coming days. The altcoin’s price action fosters more conviction that it will plummet once the latest excitement fades. 

The cryptocurrency will drop as low as $220. Monday’s price action hints at a possible flip that may send AAVE to $200. 

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