Aave Faces Bear Market as Price Drops 21%
Despite the recent launch of its real-world asset tokenization platform, Aave (AAVE) has entered a bear market with a price decline of over 21% from its peak last week.
The cryptocurrency has fallen to $300, marking its lowest point since August 22, following the trend of Bitcoin and other altcoins in the market.
Horizon Assets Show Growth
Despite the price drop, Aave continues to perform well in the decentralized finance sector, with its total value locked reaching near record highs. The total value locked on the network has increased by 22% in the last month to $40 billion, accompanied by a rise in seven-day fees to $21.2 million.
This growth can be attributed to the success of Aave’s Horizon product, designed to bridge the gap between traditional and decentralized finance. Horizon allows institutional investors to borrow stablecoins by using tokenized real-world asset (RWA) collateral.
Since its launch, Horizon has seen significant traction, with total available funds reaching $50 million and users borrowing tokens worth $6.2 million. Notable assets in the network include Ripple USD (RLUSD) with over $26.3 million, followed by USD Coin with $8 million.
Technical Analysis of AAVE Price
Looking at the daily chart, Aave’s price has retraced from its recent high to $300, finding support at the 50-day moving average. The token is currently within an ascending channel, with a potential downside target of $280 before a bounce back towards the upper channel boundary.
If Aave breaks below the lower channel support, further downside could lead to a test of the $245 level, its lowest point in late August.