Aave price has been under intense pressure lately. After soaring to an all-time high of $580 last week, the price has dropped by 26% to the current level of $433. Its total value locked (TVL) has also dropped from more than $6 billion to the current $5.35 billion.
Aave is a relatively new Decentralized Finance (DeFi) project that allows people to borrow ERC tokens. It also enables people to earn yield by lending their crypto to the pool. At the time of writing, one can borrow DAI with an APY of between 22.47% and 27.47%. Also, one can make an APY of 10.7% by lending to the DAI pool.
Aave has been on an uptrend recently, which has seen its total liquidity pool rise to more than $5 billion. Even with the recent decline, Aave is still the second-biggest DeFi project after Maker. The tradable Aave token is the 22nd biggest crypto in the world.
In all fairness, my recent prediction on Aave price have been wrong. A few weeks ago, I predicted that the price would soar to $600. I then followed that with another prediction that the price would soon rocket higher. Let’s hope this prediction gets it right.
On the four-hour chart, we see that the price has managed to move below the lower line of the ascending channel. It did this on Monday, when it reached a low of $352. Since then, it has been attempting to rebound but it is still below the channel. Therefore, in my view, bulls will likely attempt to go back to the channel and possibly retest the YTD high of $580.
On the flip side, a drop below $352 will invalidate the bullish thesis. In fact, if this happens, we should not rule out another decline below $300.
