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AAVE has skyrocketed over 118% in the past 6 weeks and is now entering its 7th week of gains. Given the bullish technical outlook, will the uptrend continue, or will there be a cooling off?
Recent Developments: Ecosystem Growth Strengthens Rebound
In the past two weeks, Aave has made significant progress in strengthening its ecosystem. On May 12, Aave DAO approved the expansion of the Chainlink Security Value Recovery (SVR) mechanism. This has increased TVL coverage from just 3% to over 27%.
This move enhances the protocol's risk mitigation capabilities and makes Aave a safer lending platform.
Subsequently, the team officially launched Aave v3 on Aptos on May 19, marking its first deployment on a non-EVM chain. This cross-chain expansion will broaden the user base and enhance liquidity flexibility for developers and lending institutions operating outside of Ethereum.
As of press time, the price of AAVE is $264.71, up 20.35% over the past 24 hours, with 24-hour trading volume surging to $808.39 million (+66.97%), and market capitalization reaching $4 billion. Demand continues to strengthen after the announcement.
AAVE/USDT Parabolic Rebound Approaches Major Resistance
The daily timeframe shows that AAVE's price has rapidly risen since April 9, forming a parabolic shape that pushed the token price from $121.75 to over $265 — an increase of 118% in just six weeks.
This upward trend has broken through the descending resistance line and is currently testing the key resistance zone between $285 and $300, consistent with the previous distribution levels in February.
Currently, AAVE is trading at the upper Bollinger Band, indicating price extension. While this shows strong buying momentum, it usually also signals a short-term pullback or consolidation.
Momentum indicators are also showing similar situations.
The RSI index is at 74.88, entering the overbought zone for the first time in this rebound. This reflects strong buying power but also suggests that unless supported by volume, the upward space may be limited.
MACD remains in a bullish crossover, but the histogram bars are narrowing - indicating that while momentum is still positive, it is weakening.
OBV (On-Balance Volume) - tracking volume relative to price trends - has flattened on the chart after a steady rise in April, now at 29.04 million. This visual indicates that despite the price continuing to rise, buying pressure has stagnated.
This usually indicates that the upward momentum is weakening, as there are fewer buyers supporting the current uptrend.
Meanwhile, the volume oscillation indicator used to compare short-term and long-term average volumes shows +10.74% — still in positive territory, but significantly lower than the peak at the beginning of May.
The decline on the chart indicates that the pace of new capital inflows is slowing down, which means that bullish momentum still exists but is not accelerating.
Overall, these indicators reflect that the market may soon enter a pause or pullback phase, especially without new volume coming in to push AAVE above the current resistance area.
If AAVE breaks and closes above $300 with strong confirmation, the next target is $340-$360. However, if the uptrend stagnates, the support level is at $240, followed by $210, close to the 20-day moving average and the middle Bollinger Band.
As of now, the daily structure remains bullish, but momentum indicators show that as prices approach weak levels, caution is needed. We should closely monitor the $285-$300 range for breakout continuation or reversal signals.
AAVE On-chain Metrics: Holder Confidence Remains Strong
According to volume-weighted breakeven data, 81.92% of AAVE tokens are currently in the 'in-the-money' state.
Only 11.95% of tokens are in a loss state, reducing the likelihood of a significant sell-off.
The 'Active Addresses by Profitability' chart shows that profitable wallets hold 13.41 million AAVE, valued at $3.55 billion.
83.44% of active users are in profit, indicating that traders using the protocol or actively trading do not face pressure to exit.
These data suggest that most holders are enjoying profits and are not in a hurry to exit—supporting the view that unless there is a drastic change in market sentiment, the pullback may be minimal.
Everyone's attention is focused on the $300 resistance level.
AAVE's six-week rally remains strong, thanks to a solid technical uptrend and healthy on-chain support. Nevertheless, the current rally is losing some volume momentum, and the $285-$300 zone remains the bulls' bottom line.
If this level breaks and receives strong confirmation, it will open the path to $340-$360. Otherwise, a pullback to the $240 support level may occur in the short term, followed by a continuation of the upward trend. The outlook remains bullish, but volume and buying power above $300 will determine the next phase of movement.
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