AAVE, the second-largest player in decentralized finance (DeFi), has had an impressive year, reaching its highest value since 2022. The token has surged to $160, marking a nearly 120% increase from its lowest point this year and bringing its market capitalization to over $2.5 billion.
Significant Growth in Total Value Locked (TVL)
AAVE’s performance has been bolstered by a substantial rise in assets within its network. Current data indicates that the total value locked in the ecosystem has exceeded $12.1 billion, positioning AAVE as the second-largest player in DeFi, trailing only Lido, which boasts over $25 billion in staked assets. EigenLayer, Ether.fi, and JustLend follow behind.
Revenue and Activity Insights
This growth has translated into significant fees within the network. According to TokenTerminal, total fees generated this year have surpassed $287 million, making AAVE the third most profitable platform in DeFi, following Lido and Uniswap.
An uptick in whale activity has also contributed to AAVE’s price increase over the past few months. Several large investors have made substantial purchases, currently holding a majority of AAVE tokens, followed by retail investors. Data from Nansen shows that while the number of smart money investors has slightly declined, it remains significantly higher than the June low of 71, with a steady total balance of 439,000.
Market Movements and Federal Reserve Impact
The largest smart money investor holds over 25,000 AAVE tokens valued at over $4 million, along with other cryptocurrencies such as Ethereum and Pepe. AAVE’s price jump has been further influenced by the Federal Reserve’s decision to cut interest rates by 0.50%, signaling potential additional cuts in the future. Lower interest rates could lead to increased inflows into lending platforms like AAVE and JustLend.
Technical Indicators
AAVE’s price increase coincided with the formation of a golden cross pattern in July, where the 50-day and 200-day exponential moving averages crossed. This pattern has continued to show a series of higher highs and higher lows. Notably, AAVE has converted a key resistance level at $150 into support and has surpassed the significant point of $153.68, its peak from March this year.
Most importantly, AAVE has formed a cup and handle pattern, a well-known continuation signal. Analysts suggest that AAVE may continue to rise as the DeFi sector recovers, with a key target of $170 to watch for in the near future.