Aerodrome’s cryptocurrency, AERO, has experienced a substantial upsurge attributed to the rapid expansion of Base, an Ethereum [ETH] L2 solution.
A key player in the Base ecosystem, Aerodrome serves as a pivotal decentralized exchange (DEX) and automated market maker (AMM).
The growth of the L2 platform has significantly propelled the protocol forward. By 2024, Base’s Total Value Locked (TVL) had surged by 6 times, reaching almost $3 billion.
During the same period, Aerodrome Finance’s TVL witnessed a remarkable rise from $100 million to over $1.3 billion, marking a 13-fold increase.
The primary beneficiary of this surge has been Aerodrome’s native token, AERO, which has soared by an astonishing +1200% year-on-year. With Base expected to witness further growth, the question arises – should AERO be on your radar?
Assessment of AERO’s Potential
AERO demonstrated a substantial recovery of over 140% during the broader market rebound in September, only to face resistance in the range of $1.3 to $1.5 (identified as a supply zone).
The subsequent pullback found support around the $1.2 level, underscoring its significance as a pivotal level to monitor.
A further upward movement towards $1.5 could trigger a 36% recovery, while pushing above $2 might yield nearly 100% in potential gains.
The technical indicators on the chart suggest ample room for growth, as they are distant from overbought territories.
Despite this positive outlook, the looming uncertainty and volatility surrounding the upcoming US elections could still impact the market. A breach below $1.2 might offer a potential buying opportunity at $0.8.
Influx of Weekend Spot Demand
The recent 18% surge over the weekend was predominantly spurred by spot demand, evident from the noticeable increase in spot Cumulative Volume Delta (CVD).
This particular metric gauges the gap between buying and selling volumes, with the spike indicating a surge in buying volumes and hence a bullish sentiment.
Conversely, interest in the Futures market experienced a slight dip, as reflected in a drop of nearly 1 million AERO in open interest rates. Should this decline persist, the move towards $1.5 could face delays.
Disclaimer: The information provided should not be considered financial, investment, trading, or any form of advice and solely represents the author’s viewpoint.