Highlights
Since mid-July, the cryptocurrency market has showcased high recovery momentum following a Bitcoin rally past $65k. While most of the major altcoins leveraged the bullish sentiment to extend north march, the AAVE price underperformed and reverted below the $100 floor. However, a deeper analysis of a shorter time frame shows this pullback as a bull-flag formation, projecting an opportunity to capture the next recovery leap.
Amid the early July market recovery, the AAVE price correction showcased bottom formation at $76. This horizontal support since October 2023 remains a high accumulation zone for crypto buyers, boosting the coin value by 50% to hit $106.8 high.
On July 12th, the rising AAVE coin breached the downsloping trendline of the descending triangle pattern, signaling an early sign of trend reversal. However, the altcoin price reverted immediately to trade at $95, while the market cap fell to $1.418.
However, an analysis of the 4-hour chart shows the pullback resonated strictly within two converging trendlines revealing the formation of a bull-flag pattern. The decreasing volume accompanying the drop also indicates a reduced willingness among traders to initiate short positions.
Moreover, a recent analysis by IntoTheBlock’s content partner Champagne Mam highlights the significant growth in 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.
According to @intotheblock, $AAVE dominates DeFi lending, surging from $5.5B in May to $8.22B in loans today.
Spark, Euler and Radiant Finance are also gaining traction.https://t.co/jVpi8HhtNq pic.twitter.com/R572TfCNrI
— champagne mami 💕 (@EkponoAkwaowo) July 23, 2024
This surge underscores AAVE’s pivotal role in the DeFi ecosystem and its capacity to attract substantial loan volumes. Moreover, the emergence of competitors like Spark, Euler, and Radiant Finance fosters innovation and provides users with diverse options for their lending needs.
If the flag identification is corrected, the AAVE price is poised to breach the overhead trendline as a signal of renewed recovery. The post-breakout rally could push the $114.7, followed by $134.
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