AAVE Price Nears Yearly High Amid Booming On-Chain Metrics

Key Takeaways

• The Aave (AAVE) price is only 11% from a new yearly high.
• It leads other Decentralized Finance (DeFi) protocols in on-chain metrics.
• Can the AAVE price sustain its momentum and reach a new yearly high?

The AAVE price started 2024 slow but has regained its footing since July. Unlike most of the market, its price created a higher low in August, which fell to new lows. AAVE has increased by over 85% since and is approaching its yearly high.

Will AAVE maintain its momentum and reach a new all-time high, and can it move above $200? Let’s find out

AAVE Price Breaks Out

The weekly chart shows that AAVE has increased alongside an ascending support trend line since June 2023. While doing so, it made several unsuccessful breakout attempts above the $115 horizontal resistance area.

While the price briefly moved above $115, it failed to sustain the increase, creating a deviation (black circle).

This all changed in Aug. 2024, when the price of AAVE finally closed above this area, confirming the breakout.  Last week, it reached the highest weekly close since 2022 and a new yearly high of $160.

Technical indicators validate the breakout. The RSI moved above 50 while the MACD was above 0. The next closest resistance is at $250, 70% above the current price.

Aave Leads in Metrics

According to its on-chain metrics, Aave has enjoyed a great start to 2024. After surpassing EigenLayer, it is the second-biggest DeFi protocol  based on its TVL at $19 billion, only trailing Lido Dao at $22.5 billion.

Michael Nadeau, founder of the DeFi report, noted Aave’s massive lead  over its competitors. Currently, Aave has:

• 64% share in the lend/borrow market.
• 4.6x more active loans than its #2 competitor Spark Protocol.
• 5.3x more TVL than the top two lend/borrow apps on Solana.

It is also interesting to note that Aave’s active loans and TVL are both roughly 60% below their all-time highs, while 84% of its loans are on Ethereum.

Aave has also become profitable since 2023, making it unnecessary for the protocol to provide token incentives to get users. In August, Aave had $6.68 million in fee revenue , also 60% under its all-time high.

So far this year, Aave has made roughly $50 million in revenue . Its price-to-fee ratio (the equivalent of price-to-sales in TradFi) is currently 7.2, down from 2.8x a few months ago.

The protocol also boasts some very prominent users. On Sept. 12, Vitalik Buterin, Ethereum’s founder, deposited 2,851 ETH and 2.27 million USDC in Aave. So, despite his recent critical stance  regarding decentralized finance, he is still a prominent user.

Finally, Edward Wilson, head of marketing at Nansen Analytics, told CCN:

“DeFi, while established within crypto, still has a long way to go before replacing the traditional financial sector. Aave is one of the leading protocols in this sector, being both battle-tested and has strong underlying fundamentals. It is likely that if DeFi continues to gain in adoption, then Aave will grow alongside the sector. For these reasons, and many others, it’s evident why many investors are interested in the token”

These signs bode well for the future AAVE trend when combined with the positive price action.

AAVE Accelerates Increase

Finally, the three-day wave count shows that the price completed a five-wave increase starting in April (white). Then, it also finished an A-B-C correction (black). Since the final bottom on July 5, the AAVE price increase has become parabolic.

This suggests that AAVE started a long-term wave three (yellow), which will take it well above a new yearly high. If this is the accurate count, the entire increase that started in April 2023 was just wave one in a new five-wave upward movement (yellow).

The first target for the top of wave three is $244. This will give waves one and three a 1:1.61 ratio.

AAVE Yearly High Soon

AAVE’s price action and on-chain metrics are both positive, supporting the continuation of the upward movement. Recently, AAVE moved above long-term resistance at $135 and is increasing at a parabolic rate. The wave count suggests AAVE will move to a new yearly high and eventually surpass $200.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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