Aave Faces Major Breakout After Breaching Key Trendline, USDT Inflows Surge: Is $260 Its Next Target?
In the face of recent downturns in the cryptocurrency market, Aave [AAVE] has shown remarkable resilience, standing out with a surge in price amidst struggles for other digital assets.
As a leading DeFi protocol in recent months, Aave has experienced steady growth in both its user base and market performance, demonstrating its strong position in the decentralized finance sector.
The reserves of stablecoins, especially USDT, held by exchanges have notably increased, indicating a potential inflow of funds into the market.
Typically, a rise in stablecoin holdings signals the accumulation of buying power, which could have a positive impact on Aave’s price trajectory, potentially driving it higher.
Anticipating a Breakout for Aave
Recent price actions for Aave reflect its growth trajectory. Despite some selling by the founder, the token has shown significant accumulation, hinting at the possibility of reaching higher price levels.
On a larger timeframe, AAVE has consistently encountered resistance around the $140 threshold. Presently, the 4-hour chart indicates a break above a descending trendline, followed by a successful retest of this level.
Nonetheless, overcoming the $154 cycle high poses a significant challenge for Aave’s price outlook. Should Aave manage to surpass this level, price targets of $200 and $260 come into sharper focus.
Achieving these milestones relies heavily on positive movements in the wider altcoin market. The overall altcoin market cap is currently at a critical ascending trendline, and a sustained hold at this support level suggests a potential rise in prices.
GHO: A Rising Star in Crypto Swaps
Notably, Aave’s stablecoin, GHO, has been gaining traction steadily. Despite a rocky start, GHO is now showing promising signs of growth and adoption.
Running on Ethereum V3 assets, GHO boasts a circulating supply of 136.5 million tokens and is held by 2040 users. Aave has extended GHO’s reach beyond Ethereum by launching it on Arbitrum.
Many users have taken advantage of this stablecoin by borrowing GHO at attractive interest rates and exchanging it for other cryptocurrencies or stablecoins like sDAI, thus paving the way for potentially higher returns.
This strategy has exerted some pressure on GHO’s peg, leading to deviations from its pegged value of $1. However, with the introduction of the new Merit Program, GHO aims to tackle this challenge by encouraging users to hold or stake GHO.
The program offers rewards, including an attractive APR of up to 19.32%, incentivizing liquidity retention within the Aave ecosystem. Consequently, GHO’s peg stability has improved, accompanied by a rise in its overall supply.
Aave DAO Introduces EtherFi Amidst TVL Growth
Recently, Aave DAO launched a dedicated market for EtherFi, enabling users to borrow stablecoins such as USDC, PYUSD, and FRAX using EtherFi’s weETH liquid staking tokens.
Aave continues to be at the forefront of DeFi, expanding its reach to Layer 2 solutions like ZKsync and Linea. Its ability to maintain a bullish momentum while other assets faced challenges underscores its robust position in the realm of decentralized finance.
The total value locked (TVL) of Aave has surged to $10.7 billion, with a notable uptick in new user activity, especially from Base, further solidifying its standing in the market.