Last week, the AAVE token staged a thrilling "roller coaster" ride! Although the market is turbulent, AAVE's TVL (total locked value) is like an old captain, firmly anchored at around $11.7 billion. It really makes people admire its determination.
Liquidation Storm, AAVE’s “Big Test”
Last week, AAVE experienced an unprecedented liquidation feast, with the amount approaching the $300 million mark! The source of this storm was the stablecoin loans that were collateralized by wrapped collateral Ethereum (wstETH). The price of Ethereum suddenly "free fell", and the 25% plunge turned many collaterals into "naked swimmers" in an instant. The automatic liquidation mechanism was immediately activated, like a lifeboat on the sea. Although it was cruel, it ensured the financial security of the platform.
The “little happiness” behind the liquidation
Interestingly, despite the market's wailing, the AAVE protocol unexpectedly received a considerable "consolation prize" from this liquidation - about $6 million in liquidation fees. This makes people sigh that AAVE's financial structure is really flexible, just like a spring bed, the harder you press, the higher it bounces. However, this unexpected wealth did not stop the downward trend of the AAVE token, and it continued to slide down like a slide.
Tokens plummeted, and market sentiment "changed"
The performance of AAVE tokens in the past two days can be described as "terrible", falling by more than 8% in just two days. The market sentiment instantly changed from "sunny" to "cloudy", and the RSI indicator also fell all the way to around 45. The selling pressure was huge and the bearish sentiment was pervasive. This is like retail investors in the stock market. They know it is a good company, but when the stock price drops, they are nervous.
Futures market, volatile
The AAVE futures market is also very lively. The financing rate is like the waves on the sea, sometimes positive and sometimes negative. On August 10, the financing rate was still slightly smiling, with a positive value of 0.0021%, as if telling traders: "Hey, bullish!" As a result, the next day, the face turned faster than turning a book, directly turning into a negative number, the short forces launched a massive attack, and the market was full of bearish voices. The speed of the financing rate's "face-changing" is even faster than Sichuan Opera!
Conclusion: After the storm, there will be a rainbow?
This series of events of AAVE is like a living market textbook, showing us the delicate balance and fierce collision between the protocol mechanism and market sentiment. Although the AAVE token is currently facing considerable downward pressure, as the old saying goes: "After the storm, there is a rainbow." In this currency circle full of challenges and opportunities, only by keeping calm and rational analysis can you become a real winner. Therefore, investors, you might as well slow down and observe the market dynamics carefully. Perhaps the next opportunity is waiting for you not far away!
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