The Aave price is remarkably resilient, considering the Decentralized Finance (DeFi) protocol has seen a sharp drop in assets. Over the last couple of days, Aave’s Total Value Locked (TVL) has dropped $5.5 billion to $13.87b. As a result, the former market leader is now the fifth-largest DeFi project, behind Convex Finance.
Surprisingly, the AAVE token is largely unaffected and is holding onto a 14% one-month gain. However, Aave is slipping down the crypto market league table, and the protocol’s current market cap of $4.24 billion ranks it the 46th most valuable crypto asset behind PancakSwap (CAKE).
A report published by www.theblockcrypto.com on the 29th of October revealed that TRON (TRX) founder Justin Sun had withdrawn billions of dollars of liquidity from the Aave platform’s lending pools. Sun’s decision to pull funds from Aave follows a tweet from Yearn Finance founder Andre Cronje who suggested Aave is ‘vulnerable to the same exploit’ that saw $130 million stolen from Cream finance last week.
The daily chart shows the Aave price is trading inside a rising triangle pattern. The lower edge of the formation provides support at $297, whereas the top edge provides resistance at $371. The 100 and 200-Day Moving Averages at $339.13 and $342.88, respectively, reinforce the upside resistance. As long as the price remains below the 200-DMA, it’s vulnerable to a test of trend support.
Additionally, the Relative Strength Index (RSI) is rolling over and heading into negative territory, supporting my bearish view. If this results in the AAVE price losing trend support, a downside acceleration could target the September low at $252.37.
Furthermore, if Aave’s TVL drops further, I can argue for an extension to the July low of around $212. However, a close above the 200-DMA invalidates this view.
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This post was last modified on Nov 02, 2021, 08:32 GMT 08:32