The brainchild of Stani Kulechov, Aave, and its precursor LEND and has been among the leading cryptocurrencies in the decentralized finance domain even before the term DeFi was coined in the blockchain market. AAVE is a key cryptocurrency in the Defi space with an emphasis on developing transparent peer-to-peer lending and borrowing crypto networks.
Unlike the conventional finance system, one can use AAVE without requiring any registration or even the Know Your Customer service. One just needs to connect their wallet to deposit, borrow, stake, or swap on the Decentralized Finance market. Since it was originally developed on the Ethereum network, all the transactions are automatically excited on the ETH blockchain with the help of smart contracts.
The borrowing is done on lending pools created by the deposits of a large number of lenders. Each of the lending pools has server funds to act as a hedge against impending volatility. Each depositor is rewarded for adding liquidity to the lending pools. Depositors earn from a percentage of flash loan fees and the interest generated from the borrowed amount by other borrowers.
Aave offers all its borrowers the flexibility to choose their interest rate method from Fixed, Variable, and Floating. The fact that it does all of the processes without requiring any intermediary, bank, restriction, or regulations, AAVE has become the new favorite of the crypto world.
At present, AAVE ranks at the 34th position in terms of the market capitalization of USD 5 billion and a total circulating valuation of 13.177 million coins. The rapid rate of it making a new high and dominating the DeFi marketplace is the reason more and more people are interested in owning this native cryptocurrency. There are only a total of 16 million coins available.
AAVE Price Analysis
AAVE is no doubt a great investment opportunity, but the fruits of investment have yet to give back some returns. Despite having delivered over a 100% return in the last few days, it has been difficult to maintain a buying or positive sentiment. The tough resistance around $420 has been creating selling pressure every time AAVE attempts to break the level.
Comparing the movement concerning the 100 and 200 days moving average, the strength of this rally so far seems a bit dull. Although AAVE returned to claim its fame of $400 from $300 levels in less than a week, we are still skeptical if the current price movement can push the $420 mark on a closing basis.
Yesterday was a good day for AAVE as it hit a gain of 17% with double the volume of the previous day. The previous failures were indicated even before happening by the flat bottom and consolidation patterns. Aave seems to take support from 100 DMA active at $318, which helped it take over even the 200 DMA. However, the price movement will be stalling before $400 as per our AAVE forecast. A rally towards $500 is overdue for the last three months. RSI indicator signifies a decent reversal from close to negative zones towards bullish levels.
AAVE has taken off towards its stronger resistance level of $420 in a vertical movement towards $305. The price movement has been strong with back-to-back buying volumes, but consolidation near $400 levels has once again hammered the buyers. On closer look, buyers are active in the range of $377 to $384, but a decent trend line. Successfully trading above $400 can initiate a fresh buying spree bullish AAVE closer to its failed resistance level of $420. MACD on the hourly chart has given a clear bearish covering signal.