AAVE Jumps 21% as AAVE DAO Reveals its 'Most Important' Proposal

AAVE is the market's top performer, rising more than 21% in one day. This sudden spike comes with the rise of a pivotal AAVE governance proposal

A massive 94% explosion in trading volume accompanied AAVE's 21% price surge in one day as the market's top performer. This sudden spike comes with the rise of a pivotal AAVE governance proposal.

The proposal, which is set to be voted on by AAVE (CRYPTO: AAVE) community members, aims to enhance AAVE tokenomics, revenue redistribution, and liquidity management.

Here's a breakdown of AAVE's technical analysis, the new proposal, and the implications of its passage.

What Happened: AAVE has been steadily increasing its market capitalization over the last two years as it navigates new resistance levels. The asset breached major resistance levels of $191.36 and $209.74 during the latest upsurge.

The rise in Aegis units is due to the proposal for governance, which describes a strategic overhaul of the AAVE tokenomics update. The proposal will increase revenue sharing for users staking their AAVE tokens.

AAVE DAO also wants to introduce a self-protection protocol called "Umbrella," which will protect users from losses in case of market crashes.

The new proposal is being discussed by the community and is expected to be put to a vote in the coming weeks. If approved by the AAVE DAO, the proposed updates will significantly enhance AAVE's token utility and reinforce its position in the decentralized finance (DeFi) market.

A move past $216 might see AAVC retest the critical $228 resistance level. The sustained uptrend of the asset could drive the price to new peaks.

Assuming the market sentiment turns bearish, the asset might rally downward to the $202 range. The weakening buying pressure raises a potential risk of a drop below $187 support.

Graph 1 – Provided by Sarayucyzie, published on TradingView, March 5, 2025

The Chaikin Money Flow (CMF) indicator, aligned at 0.16, suggests positive money flow with strong buying pressure in the market.

The implication is that the market participants are actively accumulating AAVE, potentially driving the price upward.

Meanwhile, AAVE's daily trading volume has surged by over 94.82%. This significant increase in volume could be attributed to heightened interest and activity in the AAVE market.

Furthermore, the Bull Bear Power (BBP) value of 22.74 implies that bulls have control over the market. AAVE's daily relative strength index (RSI), resting at 58.20, signals neutral-to-bullish momentum in the market.

Related Link: A Deep Dive Into AAVE's Upcoming Proposal: A Critical Vote For The DeFi Giant

Why It Matters: AAVE is a leading DeFi protocol that provides lending and borrowing services. The protocol's native token, AAVE, is used for governance and to participate in the protocol's activities.

As the DeFi market continues to grow, AAVE is well-positioned to benefit. The protocol has a strong brand, a loyal community, and a valuable token.

The passage of the AAVE governance proposal would be a watershed moment for the protocol. With a more robust revenue-sharing mechanism, more token buybacks, and enhanced risk protection, AAVE is setting itself up for long-term prosperity.

Investors will be paying close attention to the forthcoming governance vote to determine whether AAVE's upward trend holds. If AAVE continues on its upward trend, the asset may break past $216 and test the $228 resistance point, even further cementing its bullish momentum.