Aave price has been in a tight range recently. The second-biggest DeFi project is trading at $517, which is slightly below the all-time high of $576. Other DeFi projects like Uniswap, SushiSwap, and Maker have also lagged behind those of other cryptocurrencies like Bitcoin and Litecoin lately.
The background: Aave is the second-biggest decentralized finance project in the world with more than $5.86 billion in total value locked (TVL). This figure has grown from less than $1 billion last year.
Aave is in the lending category of DeFi. Its network, built on the Ethereum blockchain, allows people from around the world to borrow collateralized loans. Other people can supply liquidity to the network and earn interest. Unlike the centralized financial institutions, interest rates in Aave are determined by the supply and demand of the liquidity.
In my previous article on Aave price prediction, I predicted that the currency would soar to $600 helped by the rising TVL. To some extent, this thesis played out relatively well but the price found a substantial resistance at $576.
In the past few days, the price has been consolidating between $576 and $392. It is also being supported by the 25-day EMA and the ascending trendline. This consolidation resembles a bullish flag pattern. Therefore, in the near term, there is a possibility that Aave price will rise to $600 but bulls will need to move above the ATH of $576 first. However, a decline below $400 will send a signal that there are still bears in the market.
