AAVE Price Rebounds for the Second Consecutive Day as Smart Money Investors Buy the Dip

AAVE (AAVE), the largest lending protocol in the crypto industry, climbed to $341 on Monday, Dec. 23, marking a 25% increase from its lowest level

AAVE (AAVE) price rebounded on Monday, continuing its recovery from last week’s losses. The token rose by 25% from its lowest level last week, reaching $341 on Monday. This pushed AAVE’s market cap to over $5 billion.

The rally in AAVE price was not driven by any specific AAVE-related news but appeared to be part of a broader rebound in DeFi tokens. Curve DAO Token (CRV) rose by 10%, while Raydium (RAY) was up by 5%. Other leading DeFi tokens, such as Chainlink and Lido DAO, also saw upward momentum.

AAVE is the second-largest player in the DeFi industry, with over $19.6 billion in assets under management across chains like Ethereum, Polygon, and Arbitrum.

AAVE price also found support from its strong fundamentals. It remains the second-largest player in the DeFi industry, managing over $19.6 billion in assets across chains like Ethereum, Polygon, and Arbitrum.

According to Nansen data, exchange balances of AAVE tokens continued to decline, indicating that investors are holding rather than selling. The total tokens held on exchanges fell to 5.51 million, down 2.27% from the previous week. A reduction in exchange balances is usually viewed positively in the cryptocurrency market.

The data also highlighted increased activity among smart money investors, with the number of smart money AAVE holders rising to nearly 50, up from less than 30 in June. Smart money balances now stand at over 430,000 tokens, up from a year-to-date low of less than 340,000. This accumulation is generally considered a bullish signal for a cryptocurrency.

Among the smart money buyers, Donald Trump’s World Liberty Financial has emerged as a significant holder. The company, which is building a financial services network in the Web3 space, has over 6,000 AAVE tokens valued at more than $2 million.

AAVE price technicals point to more upside

AAVE price technicals suggest that the token has more upside to go in the next few days. The coin formed a hammer candlestick chart pattern on December 20 as cryptocurrencies fell. A hammer forms during a downtrend and is characterized by a long lower shadow and a small body.

Moreover, AAVE price is finding support at its 50-day moving average and is approaching the weak, stop, & reverse level of the Murrey Math Lines. This suggests that the token may continue rising, with the next significant resistance level to watch being $375.