Aave (AAVE) had a wild ride today, shooting up by as much as 25% fueled by optimism and increased trading activity. The cryptocurrency hit an intraday high of $269 on May 20, marking its highest level since February. This surge makes AAVE one of the best-performing cryptocurrencies in the market right now, climbing over 132% from its April low.
Trading volume also saw a significant spike, with over $800 million worth of AAVE changing hands today, the most active day since early March. Additionally, AAVE’s futures open interest reached an all-time high of $569 million, showing strong demand from derivatives traders. The positive funding rate for two weeks in a row indicates that most of the market is betting on further upside, with long traders paying short traders.
The recent progress on the GENIUS Act, which aims to provide a regulatory framework for stablecoins, has been well-received by traders. This bill is crucial for DeFi protocols like Aave, which heavily rely on stablecoins such as USDC, DAI, and its native GHO. Regulatory clarity in this area could attract more institutional investors and boost confidence in the ecosystem.
Aave has also solidified its position as the leading DeFi protocol by Total Value Locked (TVL), with a 40% increase in the past month to reach $40.7 billion. This growth has translated into significant revenue, with AAVE generating over $250 million in fees year-to-date, making it one of the most profitable protocols in the space.
The technical momentum is matched by a rise in daily active addresses, which have surged by 57% over the past two days. The weighted social sentiment has also turned positive, indicating bullish sentiment among market participants for AAVE’s short-term outlook.
On the 1-day/USDT chart, the Aroon Up indicator is at 100%, while Aroon Down sits at 0%, signaling dominant bullish momentum. The Chaikin Money Flow Index is at 0.26, suggesting more capital is flowing into the token. A potential golden cross is in development on the daily chart, as AAVE’s 50-day and 200-day moving averages approach a crossover, typically seen as a bullish signal.
As AAVE nears the 61.8% Fibonacci retracement level at $271.35, a breakout above this level could lead to a further increase towards the 50% retracement level at $347.19, approximately 30% higher than the current levels. In case of a pullback, key support is expected near $226.45, serving as a strong bounce zone before the uptrend resumes.
At the time of writing, AAVE was trading around $267 per coin, showing strong potential for further growth in the near future. Remember, investment advice is not provided here, and the content is meant for educational purposes only.
