- The exchange reserves for stablecoins saw an increase.
- Aave price action broke out of a 4-hour trendline.
The crypto market has recently faced significant declines, but Aave [AAVE] has proven resilient. In August, Aave surged in price while other cryptocurrencies struggled.
As one of the top-performing DeFi protocols in recent months, Aave has seen steady growth in both user count and market performance.
The exchange reserves for stablecoins have increased, particularly USDT, suggesting that these funds are poised to flow into the market.
Source: CryptoQuant
Typically, when stablecoin holdings rise, it indicates a buildup of buying power, which could positively impact Aave’s price, pushing it higher.
Aave set for a breakout
Aave’s recent price action reflects its growth. Despite some selling from the founder, the token has shown strong accumulation and the potential for higher prices.
On a higher timeframe, AAVE has repeatedly faced resistance around the $140 mark. Currently, the 4-hour chart has broken a downward trendline and successfully retested it.
However, price faces a key challenge in surpassing the $154 cycle high. If Aave breaks above this level, price targets of $200 and $260 become more likely.
Source: TradingView
Achieving these targets will depend on positive altcoin market movements. The total altcoin market cap is sitting at a crucial ascending trendline, and a hold at this support level signals that price is set to rise higher.
GHO swapping other crypto
Aave’s stablecoin, GHO, is also gaining traction. After a rough start in 2023, GHO is now showing promise.
Backed by Ethereum V3 assets, GHO has a circulating supply of 136.5M and 2040 holders. Aave has expanded GHO beyond Ethereum, launching it on Arbitrum.
Many users have taken advantage of the stablecoin by borrowing GHO at low interest rates and swapping it for other cryptos or stablecoins like sDAI, earning higher returns.
Source: Chaos Labs
This strategy put some pressure on GHO’s peg, causing it to deviate from its $1 value. However, its new Merit Program aims to resolve this issue by encouraging users to hold or stake GHO.
The program offers rewards, including up to 19.32% APR, and incentivizes liquidity retention within Aave. As a result, GHO’s peg stability has improved, and its supply is rising.
Aave DAO deploys EtherFi as TVL grows
Aave DAO recently deployed a dedicated EtherFi market, allowing users to borrow stablecoins like USDC, PYUSD, and FRAX against EtherFi’s weETH liquid staking tokens.
Read Aave’s [AAVE] Price Prediction 2024–2025
It continues to lead the charge in DeFi, expanding into Layer 2 solutions like ZKsync and Linea. Its resilience in maintaining bullish momentum, as other assets struggled, has underscored its strength in the DeFi space.
Source: DeFiLlama
Its total value locked (TVL) has also grown to $10.7 billion, and new user activity, especially from Base, has surged, further boosting its prominence.
