AAVE Price Jumps 145% in Two Months as Exchange Supply Hits 3-Year Low

2d ago•

bullish:

bearish:

AAVE price jumps as exchange supply drops to a 3-year low, hinting at strong holding sentiment.
Protocol fundamentals shine with record $26.42B TVL and consistent revenue.
Bullish technicals signal $400 as the next potential price target.

Aave, the governance token for the protocol AAVE, has been on its bull run, hitting a record high of $281 since February 2.

AAVE Price Hits New Highs: Rally Extends Beyond $280

The bull run, which started on April 7 when the token traded at just $114.15. There is an increase of over 145% within less than two months. Both on-chain fundamentals and technicals seem to be underpinning this strong uptrend.

One of the strongest bullish indications is decreasing exchange balances of AAVE. Santiment statistics show that there are now just 3.17 million AAVE tokens held in centralized exchanges, down from 4.53 million in November 2023. That is the lowest exchange supply since February 2021 and can mean that AAVE holders prefer to hold or stake AAVE.

Rather than selling it. Lower exchange supply normally suggests diminishing sell pressure and increasing investor confidence.

Total Value Locked Surges Over 30% in One Month

Behind this sentiment is the record-high total value locked (TVL) of the Aave protocol. The protocol currently stores $26.42 billion in TVL, a 30% increase in the past 30 days. Increasing TVL is a signal of increasing user activity and overall optimism in Aave’s DeFi model.

AAVE fee revenue is also stable, at $33.8 million in fees. Expected to date this month a touch higher than $33.3 million the month before. That stability also makes AAVE one of the highest-revenue platforms on the decentralized finance landscape.

Staking is also increasing. The staking market capitalization has come close to being double that of last month and is now at $800 million from $454 million. Amongst Ethereum. Staked AAVE price predicction is higher as low as 84,000 ETH and is currently significantly over 300,000 ETH, showing the increased trend of long-term holding strategies.

Even AAVE’s in-house stablecoin, GHO, reached an all-time high of $265 million market cap, further validating the protocol’s growing ecosystem.

Next Target: $400

Technically, AAVE price prediction has formed a golden cross on its day chart, where 50-day EMA has crossed 200-day EMA a classic bullish indication.

The Average Directional Index (ADX) has increased to 42, which suggests that the trend is strong. Moreover, a break above 38.2% Fibonacci retracement level suggests increased momentum, and the next significant target is at $400, which may log a further 45% return.