AAVE gains nearly 8% on Wednesday as crypto market digests Bitcoin’s return above $87,000

Aave (AAVE), the native token of the Aave lending protocol, is rallying on Wednesday as the crypto market recovers from Monday’s bloodbath.

AAVE price is surging by nearly 8% on Wednesday as crypto traders digest Bitcoin's return above $87,000 following Monday's market crash.

Crypto market capitalization is now back above $2.9 trillion, even as we can see that institutional traders are slowly losing interest in risk assets. This is something that could eventually weigh on Bitcoin price action.

Bitcoin, Ethereum, and XRP lag and observe a slow recovery from Monday's market crash.

What happened

Aave (AAVE) is rallying on Wednesday as the crypto market recovers from Monday’s bloodbath. Bitcoin (BTC), Ethereum (ETH), and XRP are reporting small gains on the day as traders remain risk-averse, grappling with volatility concerns this week ahead of the White House Crypto Summit on Friday.

The crypto community is also preparing for the first-ever White House Crypto Summit. Still, enthusiasm among traders seems to be capped as the crypto Fear & Greed Index on alternative.io shows that traders are fearful with the indicator at 20 out of 100.

AAVE is yielding almost 8% in gains for traders on Wednesday, while the top 3 cryptocurrencies—BTC, ETH, and XRP—lag behind at the time of writing.

Why is AAVE rallying?

AAVE recently deployed its lending markets on Sonic, a blockchain that forked from Fantom. This move marked the DeFi lending platform’s first Layer 1 expansion in 2025, part of the project’s roadmap.

AAVE’s version 3 was deployed following the approval of the governance proposal, and the launch on Sonic Labs was followed by a gain of $33 million in total value locked (TVL) within 24 hours.

Data from Lookonchain, an on-chain intelligence tracker, shows that large-scale wallet investors like izebel.eth(@izebel_eth) purchased AAVE tokens to the tune of $4.25 million on Wednesday.

BTC, ETH, and XRP are reporting gains of 1.21%, 3.15%, and 1.85%, respectively, on the day. The addition of XRP to the US Crypto Strategic Reserve has raised concerns among traders on X, sparking debates over the relevance of the altcoin. However, the token is holding its seven-day gains of nearly 8% and continues to recover slowly.

At the time of writing, Ethereum is hovering around the $2,100 level, and Bitcoin is inching closer to resistance at the $90,000 level on Wednesday.

AAVE price action

The Relative Strength Index (RSI) key momentum indicator in the daily chart is sloping upwards and is at 47, nearing the neutral level of 50. Meanwhile, the Moving Average Convergence Divergence (MACD) shows a bullish crossover, suggesting there is underlying positive momentum in ASEE’s price trend, albeit relatively small compared to the last week of February.

AAVE trades at $224 at the time of writing and is steadily climbing towards the 10-day and 50-day Exponential Moving Averages (EMAs) at $251.77 and $254.04, respectively. A re-test of resistance at the 50-day EMA at $254.04 would mark over 13% gains in AAVE price.

On the downside, the DeFi token could find support at the lower boundary of the Fair Value Gap (FVG) on the daily chart at $213.

Expert comments on crypto market recovery and impact of proposed tariffs

After the steep decline in crypto prices on Monday, crypto traders are digesting the impact of the pump and dump that followed US President Donald Trump’s strategic reserve announcement. Though Bitcoin rallied to its all-time high in January, the token recorded a 17.39% decline in February, the largest drop since 2014.

While the market reels from over $1 billion in liquidations across derivatives exchanges, traders are fearful.

Uldis Teraudklans, Chief Revenue Officer at Paybis, discussed the state of the market with FXStreet and what to expect.

“Thus far this year, Bitcoin has proven more reactive to macroeconomic trends, including trade wars and interest rate trends. With large Wall Street firms now exposed to the coin, it is more susceptible to significant liquidity flows, thus contributing to its volatility. This [negative 17.39% monthly return in February] decline can be attributed to a loss of institutional appetite for risk assets, driven by the trade and tariff tensions initiated by the Trump administration. Bitcoin's correlation with the S&P 500 has further contributed to the decline.

Bitcoin has never been a safe-haven asset—only an aspirational one. Yet, the promise remains, and with