Aave (AAVE) price recently experienced a significant dip of over 15% in just four days, dropping from a peak of $283 on May 27 to an intraday low of $240. However, eager buyers quickly seized the opportunity to buy the dip, leading to a rebound that saw AAVE price climb back above $254 before settling around $251.
The resurgence in Aave’s price comes at a time of increased activity on the Aave protocol, particularly in relation to the growth of tokenized yield markets in partnership with Pendle (PENDL) and Ethena (ENA).
On May 27, Aave introduced support for three new collateral types—eUSDe, July-maturity PT-USDe, and August-maturity PT-eUSDe—bringing a total initial market size of approximately $700 million. The following day, Pendle launched two of these markets with supply caps of $100 million for PT-eUSDe and $40 million for PT-USDe. These caps were quickly reached, prompting Pendle to raise the limits on May 29 to $200 million and $80 million, respectively, due to high demand for tokenized yield instruments on Aave.
PT-USDe and PT-eUSDe are principal tokens that offer a fixed-yield claim on underlying assets held within the Pendle protocol. These tokens enable users to trade and monetize future yield by separating the principal and yield components of their assets. While Ethena’s PTs were added to Aave a month prior, the introduction of new collateral types eUSDe, July PT-USDe, and Aug PT-eUSDe on May 27 further expanded the platform’s offerings.
Although these PT tokens do not directly impact the price of AAVE, they demonstrate the increasing use and demand for Aave’s DeFi platform, which could ultimately benefit AAVE holders through higher TVL and network value. As of May 20, Aave accounted for 20% of all TVL in the DeFi sector, indicating significant growth and potential value for AAVE investors.
Looking ahead, AAVE price is poised for a potential 12%+ move from its current level of $251 as it aims to surpass resistance at $283. If this level is breached, the next major target is the psychological $300 mark, which could represent a nearly 20% increase from the current price. Overall, the recent dip in AAVE price is viewed as a healthy retracement within the broader uptrend, signaling potential for further gains in the near future.