Aave Shatters $1 Trillion Milestone But AAVE Token Struggles at $118 Amid Crypto Market Mood
With a total lending volume of over $1 trillion, AAVE has formally become the first decentralized finance protocol, solidifying its position
Quick overview
- AAVE has surpassed $1 trillion in lending volume, establishing itself as a key player in decentralized finance.
- Despite its success, the AAVE token is currently underperforming, trading around $118 and testing critical support levels.
- Aave is facing internal governance challenges regarding a proposed funding plan that has divided the community.
- Future price movements for AAVE hinge on maintaining support around $109, with potential scenarios for recovery or decline.
With a total lending volume of over $1 trillion, AAVE has formally become the first decentralized finance protocol, solidifying its position as the backbone of on-chain finance. Notwithstanding this enormous accomplishment, the AAVE token is presently experiencing high-beta underperformance, hovering at $118 while testing important support levels amid general market apprehension.
Aave’s Trillion-Dollar Legacy: From ETHLend to Global Liquidity Giant
For the protocol, which was first introduced as ETHLend in 2017, the $1 trillion milestone represents a significant turning point. Aave currently generates about $83.3 million in fees every 30 days and secures about $27.2 billion in Total Value Locked (TVL), which is over four times the revenue of Morpho, its nearest rival.
Heavyweights like VanEck and WisdomTree have been drawn to the protocol’s entry into traditional finance (TradFi) through Aave Horizon, and they currently use the platform to borrow stablecoins against tangible assets. Additionally, traders can now earn Aave-sourced yield on their margin collateral thanks to a recent integration with the perpetual exchange Grvt. This is the first step toward a $50 trillion tokenized asset market by 2050, according to Aave Labs CEO Stani Kulechov.
AAVE/USD Technical Analysis: The $109 Support Line in the Sand
The AAVE coin is presently trapped in a technical slump despite its intrinsic strength. Being a “high-beta” asset, Aave tends to magnify Bitcoin’s swings. Lately, Aave has underperformed the market as a whole, falling toward its $111–$109 support confluence, with the Fear & Greed Index at 16 (Extreme Fear).
The asset is presently trading below its Simple Moving Averages (SMAs) for the last seven days ($116.86) and thirty days ($121.75). The RSI-14 at 41.27 shows bearish momentum, but it hasn’t yet entered oversold territory, indicating that the 78.6% Fibonacci retracement level at $109 will serve as the “battlefield” for the subsequent move. Although the price is declining, there isn’t any indication of a “panic” sell-off at the moment, according to a 22.8% decline in recent volume.
Internal Politics: The $42 Million DAO Feud
An internal governance issue complicates the way forward. A plan to give Aave Labs 75,000 AAVE and $42.5 million in stablecoins is presently being discussed by Aave token holders. The amount of the funding has caused division in the community, adding a layer of “governance risk” that could be affecting the token price even though the arrangement will funnel all future earnings from Aave-branded products to the DAO treasury.
Aave Price Prediction: Relief Rally or $94 Retest?
The ability of Aave to maintain its current technical and psychological floor will determine its future course.
- Bullish Scenario: A recovery rally into the 30-day SMA at $121 is the most plausible base case if Aave can hold the $109–$111 support zone and Bitcoin stabilizes above $67,000.
- Bearish Scenario: The existing recovery structure would be rendered invalid with a clear daily closing below $109. Aave would probably experience a significant drop in this scenario, heading toward the major swing low of $94.17, which hasn’t been reached since the consolidation of the previous quarter.
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