AAVE Price Eyes $100 Return as DeFi Lending Hits $8.22 Billion

Since mid-July, the cryptocurrency market has shown strong recovery momentum following Bitcoin’s rally above $65,000. While most major altcoins took advantage of the bullish sentiment to extend their northward march, AAVE price underperformed and returned below the $100 floor. However, a closer look at a shorter time frame shows that this pullback is a bull flag formation, projecting an opportunity to seize the next rallying surge.

Bullish Flag Pattern Signals AAVE Price Surge to $114 Amid DeFi Growth

AAVE | Tradingview

In the context of the market recovery at the beginning of July, the AAVE Price The correction highlighted a formation below $76. This horizontal support since October 2023 remains a high accumulation zone for crypto buyers, increasing the coin’s value by 50% to a high of $106.8.

On July 12, the AAVE cryptocurrency broke above the descending trendline of the descending triangle, signaling an early sign of a trend reversal. However, the altcoin’s price immediately recovered to $95, while the market cap fell to $1,418.

However, an analysis of the 4-hour chart shows that the pullback resonated strictly within two converging trendlines revealing the formation of a bull flag patternThe decrease in volume accompanying the decline also indicates a reduced willingness of traders to initiate short positions.

Additionally, a recent analysis by IntoTheBlock’s content partner, Champagne Mam, highlights the significant growth of the Decentralized Finance DeFi lending sector, with AAVE emerging as the dominant platform. The total value of loans facilitated by AAVE has skyrocketed from $5.5 billion in May to an impressive $8.22 billion today.

This increase underscores AAVE’s central role in the DeFi ecosystem and its ability to attract substantial lending volumes. Additionally, the emergence of competitors like Spark, Euler, and Radiant Finance is driving innovation and providing users with diverse options for their lending needs.

If the flag identification is corrected, the AAVE The price is about to break above the upper trendline, indicating a renewed recovery. The post-breakout rally could push the price to $114.7, followed by $134.

Technical indicator:

• EMA: The 100D and 200D models with flat lines Exponential Moving Averages suggests that the medium to long term trend is sideways with enough room for a larger recovery.
• ADX: The downward trajectory of the ADX daily slope (22%) suggests that the dominant downtrend is losing strength.

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Frequently Asked Questions

In DeFi, lending involves users depositing their cryptocurrencies into lending platforms to earn interest. These platforms use smart contracts to automatically manage loans, ensuring that lenders receive interest payments and borrowers provide sufficient collateral.

The AAVE protocol is a DeFi platform that allows users to lend and borrow cryptocurrencies directly on the Ethereum blockchain.

Lending volume refers to the total amount of cryptocurrency that has been lent or borrowed on a DeFi platform over a given period of time.

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