Aave remained in a tight range on Saturday, but a combination of strong technicals and soaring deposits means that it could rebound soon.
Aave (AAVE), originally known as ETHLend up until September 2020, was trading at $353 at last check Saturday. It remains 370% above its 2024 lows.
Source: CoinGecko
Data shows that the total value locked in its network soared to a record high of 6.12 million ETH, or $5.12 billion. Another figure by TokenTerminal shows that the ecosystem’s net deposits are at a record high of $36 billion. That’s higher than the $10 billion in deposits it had during the same period last year.
To end the year, Aave reached a new all-time high in deposits for the first time since 2021.With $35 billion in net deposits, Aave is now the largest DeFi protocol. https://t.co/TjXLfggJuN
— Aave (@aave) January 1, 2025
This growth has made Aave a highly profitable player in the crypto industry. After all, total fees jumped to over $474 million in the last 12 months.
Most importantly, the performance has been notable since competition from lending protocols like Morpho, Spark, Compound, Venus, and Save is rising.
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Aave is now working on its V4 project, which will be the biggest upgrade on record. According to the proposal, V4 will combine a new architecture that enhances modularity and reduces governance overhead. It will also integrate with GHO, the Aave stablecoin, with over $146 million in assets. The upgrade will be launched in the second half of the year.
Meanwhile, Nansen data shows that Aave tokens are leaving centralized exchanges, a bullish sign for the coin. Its total tokens on exchanges dropped by 2.43% in the last seven days to 5.3 million. Just 33% of all Aave tokens are in exchanges, meaning that many holders have a long-term horizon.
AAVE tokens on exchanges | Source: Nansen Aave could soar to $500
Aave has bullish technicals. The chart above shows that the token bottomed at $71.41 in 2024 and has now moved above $300.
AAVE chart | Source: crypto.news
Aave has remained above the 50-day moving average, which is providing important support.
Most importantly, the coin is forming a bullish pennant chart pattern comprising a long vertical line and a symmetrical triangle. This triangle is now nearing its confluence level. This often leads to a strong breakout.
Therefore, if this happens, the initial target for the Aave token will be last year’s high at $400. A break above that level will point to more gains, potentially to the psychological point at $500.
The bullish view will become invalid if the coin falls below the 50-day moving average.
Aave, created by Finnish entrepreneur Stani Kulechov in 2017, is used for governance, staking, and other protocol-related functions.
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