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Aave: Here’s why traders should keep an eye on AAVE’s growth trajectory

3min Read

Aave’s TVL growth underscores the robust inflow of liquidity into the ecosystem. While this indicated that the token was growing for the good, a few other metrics that pointed out Aave’s ongoing upward trajectory.

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  • Aave metrics reveal that the network has been experiencing more activity and growth.
  • AAVE’s price action was headed for a support retest after cooling off since the start of October.

Maintaining growth during crypto winter has been a tall order for many projects. Aave [AAVE] is one of the few protocols that have somehow achieved noteworthy growth in some key areas, particularly in total value locked (TVL).

Is your portfolio green? Check out the AAVE Profit Calculator

According to a recent Ben GCrypto ranking, Aave was the leading protocol within the Polygon [MATIC] ecosystem in terms of TVL. This means it managed to outperform other protocols, such as Uniswap [UNI] and Balancer, just to name a few.

But just how much growth has Aave achieved and what does this mean for the protocol’s future? Well, Aave V3 is the ideal representative of that growth considering its positive TVL growth since the start of 2023. Its TVL recently peaked at $2.59 billion at the start of October. For perspective, Aave’s TVL was lower than $500,000 at its lowest level in January 2023.

AAVE price action

Source: DeFiLlama

The TVL growth underscores the robust inflow of liquidity into the Aave ecosystem. While this indicates positive growth for the network, there are a few other metrics that point out Aave’s current trajectory.

For instance, Aave V3 revenue spiked considerably at the start of September. This indicated that the network has been experiencing more activity in the last four to five weeks.

Aave fees and revenue

Source: DeFiLlama

Assessing AAVE’s price action

The surge in Aave network activity may have boosted investor confidence in the AAVE token judging by its bullish performance throughout most of September. The rally was short-lived after pushing above the $70 price tag and has been bearish since the start of October.

AAVE exchanged hands at $62.45 at the time of writing after a 14.22% retracement from its current monthly high. This latest bearish outcome has now pushed the price below the 50% Relative Strength Index (RSI) level. This means there now stood a possibility of more downside after failing to secure demand at the RSI mid-level.

AAVE price action

Source: TradingView

AAVE traders should watch out for support near the $60 price range. This is because the same price level is a historic support range. Traders should thus be on the lookout for signs of accumulation as the price approaches that support zone.

Read about AAVE’s price prediction for 2024

While the expectations of a rally are high, traders should keep an eye out for capitulation possibilities due to external market forces. Rising market concerns may water down investor confidence, potentially leading to more downside. Nevertheless, Aave’s growing network activity suggested that its native token might be bound for bullish performance in the long term.


Michael is a full-time journalist at AMBCrypto. He has 5 years of experience in finance and forex and more than two years as a writer in the crypto and blockchain segments. Michael's writing at AMBCrypto is primarily focused on cryptocurrency market news and technical analysis. His interests include motorcycles and exotic cars.
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