- AAVE prediction fulfilled. A bullish advance underway
- What’s behind the rally?
- Daily chart analysis
Yerevan (CoinChapter.com) – Aave lending and borrowing platform made a headway consistent with the prediction made on August 4.
The digital asset broke the resistance of the technical formation it was trading in and gained over 15 percent in 24 hours. The new collaboration behind the uptrend caused funds withdrawals.
Declining liquidity supply on exchanges is indicative of traders’ intention to hold the token than exchange it. This desire raises the price through supply shortage and further fuels the demand.
What’s behind the rally?
The world’s largest crypto index fund manager, Bitwise Asset Management, brought on the latest AAVE price surge. The investment advisor announced the launch of Bitwise Aave Fund, along with Bitwise Uniswap Fund. The collaboration will add to the growing Bitwise suit. It will also provide new opportunities for both AAVE and UNI.
According to the asset management corporation, they recognize the growing demand for DeFi solutions. Moreover, the company is ready to aid the progress and collaborate with leading DeFi platforms.
Uniswap and Aave are the two largest DeFi protocols in our DeFi index, and are the largest decentralized exchange and decentralized lending protocol in the world, respectivelyCommented Matt Hougan, the chief information officer at Bitwise.
The Bitwise Aave fund will invest directly in AAVE, which is likely to impact the price positively. As of the moment, the token traded at $356 in the European session Thursday.
AAVE daily chart
The AAVE price action formed an ascending triangle, a continuation pattern that expected the token to go south once the triangle is exhausted. However, as discussed yesterday, the chances of a bullish break overpowered the technical formation and boosted the lending token to break the resistance.
As expected, the cryptocurrency sought support from the 20-day exponential moving average (EMA-20). However, it rebounded off the wave in the early hours of August 4 and peaked at $362 before stabilizing at $353 hours later.
The relative strength index (RSI: token momentum indicator) slightly changed its trajectory from the sharp ascend and turned sideways. However, a stable and high RSI at 67 indicates that the token is in high esteem with traders at the moment.
The RSI, however, did not cross the average range of 30-70. Thus, the position indicates the traders’ support without giving them the fear of investing in an overbought asset.
Bitwise’s collaboration with the Aave platform fueled the token’s rally and resulted in a 15 percent advance. However, the prediction made on August 4 was based on the excessive liquidity in the AAVE pools, as traders withdrew from exchanges, wishing to hold their coins rather than exchange them.
The prediction had merit and was confirmed by the August 5 price action. However, there are possibly more gains ahead for the digital asset as it faces more institutional adoption.