After rising more than 30% this week, Aave prices rose further this week, trading above $370 on Friday. On-chain data supports a continued rise as AAVE’s daily trading volume, active addresses, and TVL reach record levels. Another sign of optimism is the continued purchase of AAVE tokens by Trump-backed DeFi platforms. The technical outlook suggests further upside with a target of $500.
After rising more than 30% this week, AAVE price extended its gains to above $370 on Friday. AAVE’s on-chain metrics support this rise as trading volume, active addresses, and total value locked (TVL) reached record levels.
Other signs that further strengthen the bullish outlook include token purchases and whale actions by DeFi platforms backed by President Trump. In this context, the technical outlook suggests a possible rise towards the psychological level of $500.
AAVE on-chain indicator remains bullish
Aave's price has risen more than 30% this week and is up nearly 80% so far in December. This recent rally brings AAVE's current market cap to $5.48 billion, according to CoinGecko.
A look at on-chain metrics confirms this price increase. AAVE’s TVL increased from $13.77 billion on November 1 to $23.46 billion on Friday, the highest since its founding in November 2017, according to data from cryptocurrency intelligence tracker DefiLlama.
This increase in TVL is indicative of increased activity and interest within the Aave ecosystem, as more users are depositing and utilizing assets within AAVE-based protocols. Masu.
AAVE TVL chart. Source: Defilama
Santiment's active address data, which tracks network activity over time, increased from 1,635 on Wednesday to 5,079 on Thursday, the highest level since June 25, 2023. This shows the growing demand for AAVE's use of blockchain.
AAVE daily active address graph. Source: Santiment
Another aspect supporting the bullish outlook for the platform is the recent surge in trader interest and liquidity on the Aave chain. AAVE's daily trading volume on Thursday reached $2.36 billion, the highest level since October 28, 2021, according to Santiment data.
AAVE daily trading volume chart. Source: Santiment.
Technical Outlook: Looking at $500
Trading at around $370 at the time of writing, Aave has seen a 50% price retracement level of $356.80 from its May 18, 2021 all-time high of $668 to its June 2022 low of $45.60. I broke through.
If AAVE continues its uptrend and closes above $356.80, the upside could extend to retest the next resistance at the 61.8% Fibonacci retracement level at $430.24. A close above this level could extend the rally to retest the psychologically important $500 level.
However, the Relative Strength Index (RSI) on the weekly chart is at 81, indicating extremely overbought conditions and suggesting that the risk of a correction is increasing. Traders should be careful when adding to long positions as there is an increasing likelihood that the price will fall.
Still, the RSI is very stable and upwards, so the rally could continue and the indicator could move higher or even stay within the overbought levels. If the RSI decisively breaks out of overbought territory, a clear sell signal will occur.
AAVE/USDT weekly chart
Other signs of optimism for AAVE
In addition to the technical outlook and on-chain indicators, other factors also support the bullish theory. President Trump-backed DeFi platform World Liberty Financial (WFLI) Multisig Wallet spent $1 million to purchase 3,357 AAVE tokens on Thursday, according to Lookonchain data. WFLI added another $246.7 thousand worth of AAVE on Friday.
Additionally, during the same period, asset management company Galaxy Digital withdrew 27,722 AAVE worth $10.19 million from the exchange.
