DeFi Performance in August | Credit: Hameem Sarwar
Key Takeaways
- Decentralized Finance (DeFi) was the best-performing category in August
- AAVE led the way with a 7% increase, the only project with a positive performance.
- Will the AAVE price continue its run in September, or does a downturn await?
August was a bearish month for the cryptocurrency market, especially because of the Aug. 5 decline. While the market attempted to recover the rest of the month, another downturn followed in the final week of August.
Nevertheless, some categories and projects within them have been more resilient than others. More specifically, the Decentralized Finance basket fell by single digits, while its best performer, Aave (AAVE), had a positive rate of increase.
Decentralized Finance Shows Resilience
Since the start of August, the Bitcoin price has fallen by 3%, and most categories have had negative performances. The basket of Liquid Staking (green) tokens was the worst performer, falling over 31%. Other notable categories, such as Layer-1 blockchains, meme coins, and gaming tokens, all posted declines of over 20%.
However, DeFi (white) stands out from with pack with a measly 7% decline in August, over twice as small as the other ones.
In this category, the performance is skewed by AAVE (purple), which has increased by over 7% since the start of the year. The remaining tokens comprising the basket have all fallen over 10%. KAVA is the biggest loser, with a decline of 25%, while SUSHI is the second-best performer, falling slightly over 11%.
Let’s examine the AAVE price movement and see if it can sustain this increase in September.
What’s Next for Aave?
The weekly time frame chart for AAVE gives a bullish outlook. Since June, the price has increased alongside an ascending support trend line and, while doing so, managed to break out above the $120 horizontal resistance area. This critical area has existed since June 2022, except for a deviation in March 2024 (black circle).
The Aug. 19 – 26 close was the highest weekly close in over two years and confirmed the breakout from the $120 area. While AAVE has fallen since it is simply validating the $120 area as support.
The weekly RSI and MACD both support this increase. They have moved above 50 and 0, respectively (white icons), aligning with the price breakout.
If AAVE continues its increase, the next resistance will be at $245, 90% above the current price.
In August, AAVE was the best-performing token in the best-performing category, DeFi. Its price action is bullish as long as it does not close below $120. Unless that happens, a significant upward movement could follow in September.
AAVE Price Claws Back Monday Losses as August Liquidations Reach All-Time High
