AAVE takes time to fully recover

The new year has been relatively better for altcoins, which are doing well compared to general market sentiment. AAVE grew quickly. The money market platform DeFi has developed a more precise plan for 2022, which focuses on ease of use, in order to promote the activities in the chain.

After revealing plans to launch a new mobile wallet for users and expand further into Curve Finance, SushiSwap, AAVE grew in the new year. Thanks to the increased on-chain activity, AAVE got off to a good start in 2022 as prices rose almost 14% in the first 3 days. But with the collapse of the larger market, that DeFi token slipped below the critical support of $ 225.

The price needs a little boost

At the time of writing, AAVE is one of the few tokens on the market with high short-term returns. But with the general backdrop weakening its price action, it looks like this altcoin may need some support. For most of December, the parabolic price rally calmed the market from a solid rally. However, plans stalled after prices fell more than 30% from Jan. 4.

Source: trade view

With retail euphoria easing and AAVE trading volume falling, it looks like the altcoin needs a retail boost to fuel the upcoming rally. Indeed, significant volumes of coins left the exchanges on January 3, fueling the history of the supply shock and price hike.

Source: Sanbase

Good network growth

A few days ago, Aave launched a licensed credit and liquidity service from Aave Arc to help DeFi participating institutions comply with the regulation, with over 30 institutions already participating and preparing to participate.

Total Value Locked (TVL) has skyrocketed thanks to efforts to improve the protocol to generate institutional interest. However, after peaking at around $ 19 billion in October, TVL is steadily declining to $ 12.92 billion at press time.

Source: Defilama

In terms of price, while a small rally appears to be on the way like AAVE up slightly on Jan 8th on the 4 hour chart, the bigger trend is still down as around 80% of the HODLers lose money at the current level Global in and out of money indicator.

AAVE’s correlation with BTC remains at all-time lows, while volatility is flat at higher levels. The negative correlation with Bitcoin supported recent AAVE rallies as BTC consolidated, but this failed to drive AAVE above the critical resistance level of $ 225.

Source: In the Block

When the new address balance dropped by more than 4.4%, the new players also began to show skepticism. In particular, the rate of network growth eventually increased while the number of active addresses remained unchanged. This could bode well for resilience.

However, as the uptrend is currently easing and AAVE’s long-term and short-term MVRV is still in negative territory, the market has not yet shown any major reversal signals. A strong push from the retail side coupled with a price rally could confirm a near-term breakout for AAVE.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page