Aave has already recovered to the $290 level during a potential reversal—AAVE price predictions are now focused on continuing its bull market amid rampant growth in the ecosystem.
As one of the few cryptocurrencies overcoming broader market headwinds, the bullish sentiment surrounding AAVE's price outlook is strengthening.
Its recent drop has bottomed out at $275, rebounding over 12% in the past 5 hours to recover $290, as most other altcoins face profit-taking and weak hands exiting.
This strengthening occurred just days before the Fed's annual economic symposium, a key event that will set the tone for potential rate cuts in September.
Traders are lowering risk in anticipation of hawkish comments, although analysts still expect up to four rate cuts by the end of the year, which could stimulate new demand for risk assets like cryptocurrencies.
What happened to Aave?
Aave has played a significant role based solely on fundamentals, with on-chain metrics showing adoption rates hitting an all-time high.
DefiLlama data shows that the total locked value (TVL) on Aave has skyrocketed by over 50% in the past three months, reaching a peak of $40 billion, indicating increasing user stickiness and protocol engagement.
As the bull market matures, this growth rate strengthens XLM's position as a reliable DeFi play and solidifies Aave's status as the preferred lending protocol.
AAVE Price Analysis: Can the Bull Market Continue?
The bullish fundamental market warming effect could provide Aave with the momentum needed to break free from the bull flag pattern, extending its rally from early August.
The key breakout threshold is at $290, and this resistance has yet to convert into solid support.
That said, momentum signals indicate that bulls are regaining control. The RSI has rebounded from the 30s to the 40s, indicating increasing buying pressure.
The MACD line has also formed a golden cross above the signal line, a trend that typically marks the beginning of a short-term upward trend on the 4-hour chart.
A successful breakout opens the door to re-test the past strong resistance near $310 and the 2025 high near $340.
If both levels can be reclaimed, a complete flag pattern breakout would set a potential AAVE price target of $380, a 32% increase from the current price.
However, this outlook largely depends on macro signals. The Fed's dovish tone at the seminar on August 22 may lay the groundwork for risk appetite in anticipation of rate cuts.
A hawkish outcome could lead to a pullback in AAVE to re-test the support level at $275, opening the door for further declines.
