AAVE price rebounded for the second straight day, erasing some losses from last week as smart money investors bought in and forex holdings declined.
AAVE (AAVE), the largest lending protocol in the crypto industry, climbed to $341 on Monday, December 23, up 25% from last week’s low. This rally pushed the token’s market cap to over $5 billion.
The rally was not driven by specific AAVE-related news, but appeared to be related to the broader recovery in DeFi Tokens. Curve DAO Token (CRV) rose 10% while Raydium (RAY) gained 5%. Other leading DeFi tokens such as Chainlink and Lido DAO also saw an uptrend.
AAVE’s performance was further supported by its strong fundamentals. It remains the second-largest player in the DeFi industry, managing over $19.6 billion in assets across chains such as Ethereum, Polygon and Arbitrum.
AAVE token foreign exchange holdings continued to decline, suggesting investors are holding rather than selling. The total number of tokens held on exchanges fell to 5.51 million, a decrease of 2.27% from the previous week. Reducing foreign exchange balances is often viewed positively in the cryptocurrency market.
Nansen data also highlighted increased activity among smart money investors: the number of smart money AAVE holders increased from less than 30 in June to nearly 50. Smart money balances now total over 430,000 tokens, an increase from a yearly low of under 340,000. This accumulation is widely viewed as a bullish signal for a cryptocurrency.
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