AAVE (AAVE) Positions Itself for Further Growth Despite Short-Term Bearish Sentiments

Over the past year, Aave [AAVE] has experienced exceptional growth on its price charts. Throughout the past year, AAVE has spiked from a local low of $94 and managed to reach a local high of $400 before a retrace.

Aave (CRYPTO: AAVE) has emerged as the best-performing DeFi token among the top 20 protocols, according to IntoTheBlock.

Aave’s (CRYPTO: AAVE) price has experienced a remarkable surge of 177% over the past year, fueled by the protocol’s growing adoption and strong investor confidence.

Aave’s Value Triples, Outperforming Other Top DeFi Tokens

Aave’s sustained growth is evident in its market capitalization, which has surged from $1.4 billion to $3.7 billion. This growth is driven by a surge in AAVE’s price, which has rallied from a local low of $94 to a high of $400 before a retracement.

At the time of writing, AAVE was trading at $250, showing a 177% increase on the yearly charts.

Aave’s strong performance comes as no surprise, given its status as a leading decentralized finance (DeFi) protocol.

Aave’s lending and borrowing platform has seen increasing adoption, with total value locked (TVL) in the protocol surpassing $6 billion.

This growth is largely attributed to the rising demand for DeFi services and the expanding ecosystem of applications built on Aave.

Aave’s sustained growth positions the altcoin for further gains

Aave’s price is likely to experience further growth in the future, given its strong fundamentals and sustained bullish momentum on the lower timeframes.

However, Aave’s short-term outlook appears bearish due to the declining ratio of daily on-chain transaction volume from profit to loss, which has dropped to 0.22.

This indicates that for every $1 transaction, only $0.22 is executed at a profit, with over $0.88 at a loss. Such a market trend implies that investors are selling at a loss as fear is dominating the market.

Thus, weaker hands are exiting the market as they lack confidence in it.

Aave whales sell as bullish momentum slows, bearish sign

Aave whales have been selling, with large holder’s netflow declining for the past four days to -28.31k in the capital outflow, implying that there was a massive capital outflow from whales.

Such behavior suggests that whales are now selling, reflecting a lack of market confidence.

Finally, Aave long-term holders have also seen their profit margins decline, which has led to reduced market confidence among long-term holders, as evidenced by the decline in MVRV long/short difference.

When long-term holders lose confidence and start selling, it results in higher selling pressure.

In conclusion, Aave’s continued growth suggests that the altcoin still has further room for growth. Although bearish sentiments are strong, it seems it’s only for the short term, and the uptrend will return.

If these bearish sentiments hold, Aave could drop to $234. However, if the gains recorded on daily charts hold, the altcoin will reclaim $261.