- Summary:
- The AAVE price is struggling under the weight of significant overhead resistance and growing competition in the Decentralised space.
The AAVE price is struggling under the weight of significant overhead resistance and growing competition in the Decentralised Finance (DeFi) space. Aave (AAVE/USD) is trading at $298.70 (+1.2%), up +7.8% in October, and +18,500% year-to-date. The protocol’s native AAVE token is currently the 45th most valuable cryptocurrency, with a market cap of $6.9 Billion.
Aave is currently the most popular DeFi protocol, with Total Value Locked assets of $15.79 billion. Since September, the DeFi market has grown by more than $20b and is approaching May’s peak. However, in that time, over £3b of capital has migrated from Aave. Subsequently, second-placed Maker is narrowing Aave’s lead and may soon claim the top spot. As a result, the Aave price has lost around 35% in the last five weeks. Furthermore, a collection of long-term moving averages above the price have hindered recent attempts to recover.
Technical Analysis
The daily chart shows the AAVE token is snaking sideways above horizontal support at $250. Notably, the 50-Day Moving Average (DMA) at $324, the 100 at $331.70, and the 200 at $348 offer considerable resistance above the market. Furthermore, a recent failure to clear the 100-day has left a bearish double-top on the chart at $335. As long as the moving averages remain above the price, the downside looks likely. The apparent target for bears is the September low at $250. However, a steeper decline could bring the July low of $165 into focus.
In my opinion, the immediate outlook for AVAE is lower with a $250 price target, and this view remains relevant unless the price clears the 200-DMA. On that basis, a close above $348 invalidates the bearish outlook and may initiate an extension towards the August high at $453.
AAVE Price Chart (daily)
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