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Can Aave’s market dominance translate into a price hike

2min Read

Aave’s dominance in the DeFi sector continues to grow as activity and revenue on the network surges.

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  • Aave maintained 50% market share for three years, showcasing resilience in the DeFi space.
  • Despite network growth, the token’s price fell significantly.

Despite volatility in the crypto markets, Aave [AAVE] has continued to maintain dominance in its space.

Aave maintains its position

Recent data from token terminal challenged the notion that open-source crypto protocols lack competitive advantages, revealing that Aave secured more than 50% market share for three consecutive years.

In contrast, Compound Finance, a competitor, witnessed a decline in its market position over the same period.

Users and investors appear drawn to Aave’s decentralized lending and borrowing services. This consistent trust can contribute to ongoing user growth and increased adoption.

The platform’s longevity and influence may lead to increased attention from developers and users, contributing to its continued impact on the broader DeFi landscape.

Source: token terminal

In the past month, there has been a noteworthy surge in activity on the Aave network, experiencing a substantial growth of 34.5%.

Simultaneously, the revenue generated by the network has seen an impressive spike, surging by an impressive 103.4%.

The platform’s revenue growth not only strengthens its financial standing but also provides resources for continued innovation, development, and security enhancements.

These financial resources can be instrumental in maintaining Aave’s competitiveness in the evolving DeFi landscape.

Source: token terminal

Looking at the price

Despite the positive growth of the network, the overall price movement of its native token remained negative. Since the 28th of December, the price of AAVE fell by 27%.

During this period, the price of AAVE exhibited multiple lower lows and lower highs, showcasing a bearish trend.

Moreover, the CMF for the token fell significantly. A decreasing CMF could indicate a reduction in buying pressures, potentially signaling a decrease in demand for the AAVE token. It also implies a weakening of positive money flow into the token.

Realistic or not, here’s AAVE’s market cap in BTC’s terms

However, the Relative Strength Index (RSI) for AAVE showed growth. While the CMF points towards potential reduced buying pressures, the growing RSI suggests an increasing strength in the recent upward price movements.

The price of AAVE could rebound if the resistance levels of $95.73 get retested in the near future.

Source: Trading View


Himalay is a full-time journalist at AMBCrypto. A Computer Science graduate, Himalay writes about crypto with a special focus on the latest coin-based updates. He is a fan of gonzo journalism, transgressive fiction, heavy metal, and Manchester United.
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