The AAVE price is struggling under the weight of significant overhead resistance and growing competition in the Decentralised Finance (DeFi) space. Aave (AAVE/USD) is trading at $298.70 (+1.2%), up +7.8% in October, and +18,500% year-to-date. The protocol’s native AAVE token is currently the 45th most valuable cryptocurrency, with a market cap of $6.9 Billion.
Aave is currently the most popular DeFi protocol, with Total Value Locked assets of $15.79 billion. Since September, the DeFi market has grown by more than $20b and is approaching May’s peak. However, in that time, over £3b of capital has migrated from Aave. Subsequently, second-placed Maker is narrowing Aave’s lead and may soon claim the top spot. As a result, the Aave price has lost around 35% in the last five weeks. Furthermore, a collection of long-term moving averages above the price have hindered recent attempts to recover.
Technical Analysis
The daily chart shows the AAVE token is snaking sideways above horizontal support at $250. Notably, the 50-Day Moving Average (DMA) at $324, the 100 at $331.70, and the 200 at $348 offer considerable resistance above the market. Furthermore, a recent failure to clear the 100-day has left a bearish double-top on the chart at $335. As long as the moving averages remain above the price, the downside looks likely. The apparent target for bears is the September low at $250. However, a steeper decline could bring the July low of $165 into focus.
In my opinion, the immediate outlook for AVAE is lower with a $250 price target, and this view remains relevant unless the price clears the 200-DMA. On that basis, a close above $348 invalidates the bearish outlook and may initiate an extension towards the August high at $453.
AAVE Price Chart (daily)
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