AAVE, like many other altcoins, experienced a decline for the second consecutive week due to concerns surrounding tariffs. The token fell to a low of $196.4, marking a 50% decrease from its highest level this year. However, there are several catalysts that could potentially push AAVE back to its all-time high of $666, representing a 170% increase from its current level.
One positive sign for AAVE is the increased accumulation by investors. Data from Coinglass shows that AAVE’s balances on exchanges have dropped to the lowest level in years, indicating that investors are holding onto their tokens rather than selling. This is a bullish indicator, as rising balances often signal selling pressure.
Additionally, AAVE remains the largest lending and borrowing protocol in the crypto industry, with approximately $20 billion in assets. The protocol has generated over $721 million in annualized fees, with $103 million in fees earned this year alone. Despite recent market volatility, AAVE successfully processed $201 million in liquidations on Monday without accruing any bad debt.
Furthermore, AAVE’s network is expanding, with more than 440 million USDS stablecoins deposited into the network. The protocol has also moved to Base, Coinbase’s blockchain network, with a vote underway to activate it on Linea.
In terms of price forecast, AAVE shows strong technical indicators that suggest a potential rally in the coming months. The token has formed a cup and handle chart pattern, with a potential upper boundary at $400. The recent pullback is part of the handle formation, which typically precedes a strong rebound. AAVE has also formed a small hammer candlestick pattern, indicating the potential end of the handle phase and further gains ahead. Based on the depth of the cup, AAVE could surge to $765 in the long term, representing a 200% increase from its current level.
Overall, despite recent market challenges, AAVE shows promising signs of potential growth and resilience in the crypto market. Investors and traders should keep a close eye on AAVE’s performance in the coming months.