AAVE Decreases 9% Since V3 Debut on Era Mainnet — What Next
AAVE's 51% uptrend came to a halt on Aug. 21 after which we saw a 9% downturn. Is this a temporary stop before further upside movement?
Key Takeaways
- Aave increased 51% from August 12 low to August 21.
- Aave V3 launched on zkSync, enhancing scalability and security.
- Its price retraced 9%, suggesting possible “sell the news” event.
Aave was one of the best-performing cryptos in the second half of August, climbing 51% from its Aug. 12 low of $90 to a high of $143 on Aug. 21. Aave launched its V3 protocol on the zkSync Era mainnet, marking a milestone for both the Aave and zkSync ecosystems.
Despite the hype around the launch, AAVE‘s price decreased by 9%, potentially sparking a “sell the news” event. Will AAVE maintain its upward momentum moving forward?
Aave V3 Launch
This deployment uses zkSync’s zero-knowledge rollup technology, designed to enhance scalability, privacy, and security for decentralized finance (DeFi) applications. The integration allows the platform’s users to benefit from lower transaction costs while maintaining Ethereum’s security standards through cryptographic validity proofs.
Additionally, the launch opens up new institutional use cases and privacy-focused DeFi applications, which are expected to drive both interest in and adoption of the platform.
AAVE Price Analysis
In our previous analysis on Aug. 2, we observed that AAVE had experienced a robust uptrend, reaching a yearly high of $155 on March 12. This movement was part of a five-wave pattern, signaling the onset of a bullish phase.
However, following this peak, AAVE entered a corrective phase, declining to $72 by April 13, with a retest of this level occurring on July 5. This correction unfolded within a five-wave ABCDE pattern inside a descending triangle. The subsequent breakout above this triangle indicated the potential beginning of a new bullish trend.
We pointed out that the crypto had recently achieved higher highs, surpassing critical levels from prior corrections. Our outlook suggested two possible scenarios: a new five-wave impulse was forming, which could propel the price beyond $120 to the $140 region, or the current rise could represent a lower-degree B wave, potentially leading to a dip to $100 before a significant upward movement.
On August 12, AAVE dropped to $90, finding support at the 0.5 Fibonacci retracement level before rebounding. This validated our second scenario, aligning our projections accordingly.
This concluded its second sub-wave in the more significant five-wave impulse to the upside. The rise from August 12 could be wave 3, which might end at a high of $143, aligned with the 1.618 Fibonacci extension level.
We are now likely seeing the development of its corrective fourth wave, which is expected to develop as a sideways move before another higher high of $157.
AAVE Price Rallies 10% in 24 Hours, Shrugging Off Market’s Negative Sentiment
