As a seasoned analyst with years of experience navigating the cryptocurrency market, I find myself intrigued by AAVE‘s recent surge. While the U.S. session saw only a modest 0.1% growth, the short-term holders have cashed in on a substantial 50% increase within two weeks.
During trading hours in the U.S. on Friday, the price of AAVE experienced a minimal rise of 0.1%. Despite the day’s trades being neutral, short-term investors have reaped substantial profits as the AAVE coin surged from $90 to $136 – a 50% increase in just two weeks. Will this upward trend persist, or are buyers running out of steam and unable to push prices higher?
AAVE Price Hits Five-Month High Amid Aavenomics Update
Over the past fortnight, I’ve been thrilled to witness a significant rebound in the price of AAVE, peaking at an impressive five-month high of $143.7 on Wednesday. This bullish surge appears to be fueled by the recent proposal of the “Aavenomics” update, which seeks to revolutionize AAVE’s economic structure. The focus is on minimizing risks and maximizing rewards for stakers, a move that has certainly caught my attention as an investor.
AAVE intends to switch from relying on inflationary yields to using the income generated by its own protocol, aiming for a more stable and potentially less volatile system. A large investor (whale) has amassed 15,747 AAVE tokens (approximately $2.12M) from Binance as per data from Lookonchain.
A build-up of intelligent investments often hints at a positive perspective on the cryptocurrency. However, in recent transactions involving LDO and Pendle, this large investor experienced losses.
A whale withdrew 15,747 $AAVE($2.12M) from #Binance 1 hour ago.
This whale also traded $LDO and $PENDLE before but lost money on both.
He lost $1.54M(-54%) on $LDO and $640K(-39%) on $PENDLE.
— Lookonchain (@lookonchain) August 23, 2024
As a researcher examining the AAVE market, if the price of AAVE successfully maintains above the $132.5 mark, I anticipate that buyers could potentially extend this recovery by approximately 13%. Subsequently, a significant breakout rally might occur at $153, followed by a potential surge towards $200.
At a 26% level, the Average Directional Index underscores that buyers possess enough power to continue driving the market upward.
AAVE Coin Eyes Minor Pullback Before Next Leap
On the day-to-day graph, the AAVE price is currently quite distant from the swiftly shifting 20 and 50 Exponential Moving Averages (EMAs). Generally, this situation suggests an overextended rally that may trigger a brief retreat for buyers to rebuild their power.
According to Santiment analytics data, the MVRV (Market Value to Realised Value) ratio, which measures the price against the cost basis of coins held by short-term investors, has risen substantially from a negative position in early July 2024 to above 20% by late August 2024. This increase suggests that short-term holders have made considerable profits, potentially leading to more sell-offs as they seek to realize their gains.
An examination of the graph reveals that when the MVRV ratio exceeded 20%, it had previously led to a significant drop in AAVE‘s value by around 35% in early August and approximately 20% in mid-July.
Consequently, we might see a potential drop of about 14%, causing the value of the asset to approach or even touch the joint support levels of $117.5 and the 20-day Exponential Moving Average (EMA).
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2024-08-23 21:50