The recent surge in Aave price may be approaching a turning point as a concerning chart pattern emerges and whale accumulation slows down. Aave (AAVE) token reached a peak of $326 over the weekend, marking a remarkable 175% increase from its lowest point in April. With a market capitalization of nearly $5 billion, Aave is currently trading close to its December 2024 highs.
This impressive price rally is attributed to the accelerated growth of the Aave network. Data from DeFiLlama indicates that the total value locked in the Aave ecosystem has surged to a record high of $41 billion, almost doubling since the beginning of the year. The liquidity supplied on the platform has also skyrocketed to over $63 billion, surpassing the holdings of many traditional American banks.
The substantial network expansion has led to a significant uptick in monthly fees generated by Aave. TokenTerminal reports that Aave has raked in $80 million in fees, marking a 7.2% increase from July’s $74.7 million and June’s $50 million. This surge in fee collections has bolstered the value of Aave’s treasury, which now stands at $235 million, up from $176 million in April.
Despite the network’s robust performance, there are indications that the Aave price rally may be losing steam. Data from Nansen reveals that whale holdings of AAVE tokens have stagnated at 183,116 tokens worth over $59 million, with no significant purchases recorded since August 14. Smart money investors have also pared down their holdings to 293,000, signaling a potential pullback in the AAVE price.
Moreover, the token supply on exchanges has increased to 5.42 million from this month’s low of 5.4 million, suggesting that investors are starting to offload their tokens. In terms of technical analysis, the weekly chart shows that AAVE has been on an uptrend, surpassing the 50-week and 100-week Exponential Moving Averages. However, a double-top pattern has emerged, with the neckline at $113.8, indicating a potential retracement towards the 100-day moving average at $190 if the token fails to breach the double-top point at $377.
In conclusion, while Aave has experienced a remarkable price surge, caution is advised as the emergence of a double-top pattern and waning whale accumulation signal a possible correction in the near future. Investors should closely monitor key levels and indicators to assess the sustainability of Aave’s current price trajectory.