The Aave price has struggled in the past few days as momentum in the DeFi space slows. Aave’s token is trading at $369, which is 36% below its year-to-date high of $582. Its market cap has slipped by 14% in the past 7 days to $4.52 billion.
What happened: Momentum in the DeFi industry has waned recently. Data compiled by DeFi Pulse reveals that the total value locked (TVL) in the sector has slipped to $43 billion from $45 billion in February. Aave’s TVL has dropped from an all-time high of $6 billion to the current $5 billion.
Aave price is struggling today even after some positive developments in the ecosystem. The project has enabled Aave Automated Market Makers (AMM) Liquidity Protocol. AMM is an important protocol that enables users from around the world to become liquidity providers and earn money. For a start, only Uniswap and Balancer tokens will be accepted as security.
Turning to the four-hour chart, we see that the Aave price has been struggling lately. The first look reveals that the price has formed a classic reversal pattern known as head and shoulders (H&S). Indeed, at the current level, the price is at the lower side of the right shoulder. It is also slightly below the 25-day exponential moving average.
Therefore, in my view, AAVE is on the cusp of a major bearish breakout that will see it possibly retest the next psychological level at $300. On the flip side, a climb to above $400 will invalidate this trend.
