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Despite a recent decline, an emerging AAVE bullish pattern is the clearest indicator yet that the altcoin is poised for a double-digit correction that could drive holders to profitability.
According to a post on X by the DeFiance Capital founder and CEO, Arthur Cheong, whale activity and institutional interest have propelled the DeFi asset from a recent decline that saw over $5.13 million liquidated to becoming the best-performing DeFi token in recent days. In the X post, Cheong stated, “Despite the overall market weakness, AAVE’s price is close to its cycle high. This may be institutional funds buying in order to claim holdings of Aave in their year-end reports.”
The Emerging AAVE Bullish Pattern Comes After Serious Price Correction
The emerging AAVE bullish pattern emerged only one week after the altcoin faced a serious correction after it reached the $400 level one week ago, rallying over 30% from the previous week. Analysts then predicted that if the trend continued while AAVE lingered at about $343 last week Thursday, there was a possibility of a pullback that could extend the decline by another 17% to have it retest the support level of $284.63.
Last week’s weekly Relative Strength Index (RSI) for AAVE read 74, with its overbought level of 70 pointing downwards, thereby indicating a potential weakness in the emerging AAVE bullish moment.
The Bullish Pattern Could Climax in a Breakout
Despite what most analysts would have seen as a weak ending of the previous week, the emerging AAVE bullish pattern highlights the possibility of a long-term outcome following the minor retracement, with signs of ascendance being revamped.
Arthur Cheong attributes that gathering bulls to an inflow of cash from institutional players who are betting on a good outcome as the year 2024 draws to a close. According to the DeFiance Capital founder, the emerging AAVE bullish pattern could climax in a breakout that could pave the way toward a new all-time high during the closing days of 2024.
Analysts Predict a $400 Price by Year-End
As the emerging AAVE bullish pattern gathers steam with predictions of gaining at least 25% following indications of heightened buying activity, it is indicative of rising interest not only in the altcoin but the entire DeFi ecosystem as a whole. A quick review of AAVE’s price action since it hit an all-time low in June 2022 indicates that the altcoin finally broke through its key resistance level.
After hitting the 0.618 Fib level at $112 twice, it went on to test and break another key resistance at $130, which was aptly broken before ascending to $145. After forming a double bottom pattern since it descended from its highs in March 2024, AAVE broke above the neckline of the double bottom and paved the way for higher than $145. At the time of writing, the price of AAVE stood at $372.76, and analysts said it could hit $400 or above.
Conclusion
With the emerging AAVE bullish pattern, the DeFi token stands as one of the leading tokens in the world of decentralized finance with specialized products like interest-bearing assets and flash loans. The flash loan feature, one of its leading products, allows users to borrow funds, repay without collateral, and pay within a single transaction. Arthur Cheong believes that it is such pioneering products that are responsible for institutional interest and the emerging AAVE bullish pattern.
AAVE’s governance model has also empowered token holders, enabling them to participate actively in its governance. Recent expansions have broadened the variety of products and compatible assets, meaning it has multi-chain capabilities with Avalanche, Ethereum, and Polygon. All these developments have placed the altcoin strategically as DeFi moves towards mainstream adoption, hence the emerging AAVE bullish pattern.
Frequently Asked Questions (FAQs)
What are the primary roles of the Aave token?
The AAVE token is used for governance (participating in decision-making), staking (Providing security to the network), and liquidity mining (providing liquidity and rewarding users).
How do users participate in the governance of the Aave protocol?
Users can hold and stake AAVE tokens, which give them the right to vote for proposals and influence decisions on upgrades, protocol changes, and economic parameters.
Are the benefits for lenders providing liquidity on Aave?
Lenders who provide liquidity benefit by earning passive income from interest on their deposits as their funds create the liquidity pools from which borrowers receive loans.
