Aave, a decentralized finance (DeFi) lending protocol, is planning to integrate a new Chainlink oracle. A proposal was recently put forward in this direction. Following this development, the altcoin’s price has increased by 12% in the last 24 hours. Analyst Abiodun Oladokun is predicting a potential rally for AAVE.
Chainlink announced its Smart Value Capture (SVR) service on Dec. 23. This is an oracle service designed to capture profits generated via Maximum Extractable Value (MEV) and redistribute them to DeFi protocols. Following the launch, a community member submitted a proposal to the Aave governance forum to integrate SVR into the Aave protocol.
According to the proposal, liquidators and prospectors often make a disproportionate profit from Aave’s liquidation processes. This leaves less value for protocol users. Therefore, the Aave protocol plans to integrate Chainlink’s SVR system. With this integration, MEV from Aave liquidations will be distributed more fairly among all participants.
This recommendation increased trading activity in AAVE, and its price increased by double digits. Over the past 24 hours, the value of AAVE has increased significantly. In addition, the increase in open interest also indicates that the demand for the altcoin is increasing. Currently, open interest is at $376 million, marking a 32% increase. Open interest refers to the total number of contracts that have not yet been closed, and an increase in this figure during a rally indicates that traders are opening new positions. This indicates strengthening market confidence and the potential for continued momentum.
On AAVE’s daily chart, the Relative Strength Index (RSI) is in an uptrend, reflecting buying activity. The indicator is currently at 62.88. The RSI indicates whether an asset is overbought or oversold, and the current level is signaling that buyers are dominant in the market.
AAVE is currently trading below the resistance at $399.85, a three-year high. If buyers continue to accumulate, it is possible for AAVE to break out of this resistance. It could also act as support. If the resistance is broken, AAVE’s price could rise above $400 for the first time since 2021. However, if selling pressure begins, this bullish sentiment could be invalidated, with the price potentially falling to $323.46.
