Aave Price Prediction: Doubles From The low, But What Comes Next?

Summary:

Gaining more than +100% from the weekend's low, the Aave price has hit a brick wall above $400. Does this mark the top, or is there more upside to come?

Gaining more than +100% from the weekend’s low, the Aave price has hit a brick wall above $400. Does this mark the top, or is there more upside to come?

Aave is a decentralized Finance (Defi) protocol. In simple terms, it matches lenders with borrowers in the crypto space.

Lenders can place their digital assets into a liquidity pool. In turn, they are paid interest (Yield). This liquidity is utilized to finance loans to borrowers.

The DeFi industry has been a hugely popular investment theme this year. Subsequently, the Aave price increased over +800% between January and May.

On the 18th of May, the day before the Crypto market massacre, Aave was trading at $707.60. Just over a week later, it was close to $200.00.

Aave has bounced well from the lows, but it remains unclear as to whether the rally is sustainable.

Aave Price Outlook

On the 23rd, I wrote about the prospects for Aave. At the time, the price was $320.00, and I suggested it could drop by 30%.

A couple of hours after the report was published, the Aave price lost -35% as the second wave of liquidation rattled the altcoin market.

Since finding a bottom at $206.80, the token has put in some impressive work. In the following three days, Aave gained +108% to $433.00. The bounce took the price back above the 100-Day Moving average at $404.00 and the 50 DMA at $429.60.

However, the Aave price stalled at the 50 DMA and closed the day between the two indicators at $415.00.

Yesterday, the price briefly surpassed the average at $429.63. The token traded as high as $429.68 before reversing to finish the day lower by -10%, at $372.30.

Today, the price is marginally lower at $369.00. In my opinion, if the Aave price fails to clear the 50 DMA, it may drop back to $300.00.

The momentum is clearly waining. However, $350.00 should provide some support. If the price can hold above this level, it may well stage another attempt to rally above $400.

A close above the 50 DMA would be bullish and likely lead to a continuation in price, targeting the $500 level.

A failure to hold $350.00 would target the late April lows around $300. Beyond that, the obvious level to watch would be the $206.80 low of the 23rd.