Aave (AAVE) Price Prediction 2023: Will the Recovery Be Sustainable or a Mere Market Correction?

Since hitting a local low of $153 days ago, Aave [AAVE] has experienced a strong upswing to hit a high of $184.

After hitting a local low of $153 days ago, Aave [AAVE] has seen a strong upswing to hit a high of $184. At the time of writing, Aave was trading at $181. This marked a 3.79% increase over the past 24 hours. The altcoin has also seen gains on the weekly and monthly charts, rising by 8.25% and 24.52%, respectively.

Despite this price pump, Aave still remained around 72.89% below its ATH of $666.

As such, the current market conditions beg the question of whether this price recovery will be sustainable or just a market correction.

Here’s what Aave’s charts are saying

As per AMBCrypto’s analysis, Aave is seeing strong upward momentum as buying pressure increases. This has led to a bullish crossover on the Stoch RSI.

Over the past 48 hours, the Stoch has made a move to settle at 41. This indicates that buyers are taking over the market and prices are likely to rise in the short term.

This bullishness is further confirmed by the Relative Strength Index (RSI).

Over the past 24 hours, the RSI, at 58, has confirmed the uptrend after flipping its MA at 54, further confirming our observation of strong buying pressure.

Moreover, the strength of this uptrend is also confirmed by DMI, as +DMI was at 23 and remained above -DMI. This indicated that the upward momentum was strong while the downtrend had fizzled out.

Looking further, Aave investors are showing great optimism, as evidenced by a large outflow from exchanges.

According to IntoTheBlock, volume outflow has surged to a weekly high of 47.95K, reflecting investors’ confidence as they are moving their tokens off exchanges to private wallets and cold storage.

This phenomenon is further evidenced by a declining supply-exchange ratio. According to CryptoQuant data, the supply exchange ratio has declined over the past 48 hours to hit a monthly low.

Such developments suggest that investors are withdrawing more Aave from exchanges than depositing.

Finally, we can see this price rise is not arising from market speculation but from strong on-chain activities.

This is evidenced by the fact that Aave’s active addresses have surged over the past days to hit a 2-week high of 2.6K. This shows increased demand, adoption, and participation which is central to price rally.