As Aave (AAVE), a decentralized finance protocol, experiences a surge in buying interest, it has led to a bullish trend in the crypto market. Traders, however, are proceeding with caution as they assess the potential upcoming market movements.
With the release of key economic indicators such as CPI and PPI data expected this week, investors are closely monitoring AAVE’s performance which has shown promising signs.
Trading at $250.83, AAVE has seen a 1.12% increase in the last 24 hours and a 5.20% rise over the past week.
With a circulating supply of 15 million tokens, AAVE’s market capitalization stands at $3.71 billion, supported by a 24-hour trading volume of $366.86 million.
Positive Trends for AAVE
AAVE’s moving averages have indicated an optimistic outlook. The 9-period moving average is at $245.64, while the 21-period moving average is at $243.10, both showing a bullish crossover with the price trading above these levels.
This suggests a short-term upward momentum, although resistance is anticipated in the $252-$256 range. The next resistance levels are projected at $260, with support levels remaining at $243.50-$245.00.
The Relative Strength Index (RSI) currently stands at 52.95, signifying neutral momentum with a slight bullish inclination.
At this level, AAVE is neither overbought nor oversold, allowing for potential price fluctuations in either direction.
Moreover, the MACD indicator reflects a mild bullish sentiment as the MACD line at 2.14 has crossed above the signal line at -3.10, despite staying below the zero line.
Open Interest Declines Amidst Growing Trading Volume
Coinglass data shows that AAVE’s Open Interest has decreased by 2.21% to $213.97 million, indicating a drop in active derivative contracts and reduced market participation.
However, trading volume has simultaneously surged by 29.42% to $499.94 million, highlighting an increase in interest in spot markets.
The historical data reveals a peak in Open Interest between October and December, reaching around $500 million. Since then, a gradual decline has been observed, aligning with AAVE’s price stability within the $214-$271 range.
This alignment suggests that market activity is calming as prices consolidate.
Balanced Optimism with a Note of Caution
Analysis of large transactions (≥$100,000) indicates reduced activity, with 159 transactions in the last 24 hours.
The highest number of transactions in the past 7 days was 1,070 on February 3rd, while the lowest occurred on February 8th with 144 transactions.
This decline in high-value transactions since December, when AAVE’s price was close to $385, reflects a shift in market dynamics.
Sentiment analysis suggests a cautious market sentiment, with 137 bulls and 142 bears recorded over the past week, indicating a slight bearish bias.
Historically, sentiment has been balanced without a clear dominance from either side, suggesting a market that is closely monitoring economic data and price actions for further cues.