AAVE Price Fails To Respond To Temp Check Proposal For V3 Deployment on zkEVM

Key Takeaways:

• Aave Protocol shared a proposal to deploy its latest version on zkSync Era Mainnet
• Moreover, its native token formed a bearish pattern.

NEW DELHI (CoinChapter.com) — The Aave community passed a “temperature check” proposal by the DeFi lender to deploy the platform on the zkSync Era mainnet.

More than 99.5% of participants voted in favor of the proposal. Aave developers stated that deploying on the Era mainnet would help the platform expand its presence in the rapidly growing zkEVM ecosystem.

However, the lending platform would limit the initial deployment to USDC and ETH. Once the temperature check yields positive results, Aave would proceed to the ARFC stage for “further discussion, risk parameter evaluation network analysis, and finalization of the proposal.“

The proposal stated that EVM equivalence would help Aave easily adapt to a new network. Furthermore, zk compatibility would help attract new users to the Aave ecosystem and DeFi.

“zkSync will further Aave’s expansion cross-chain, reinforcing Aave’s place as the top liquidity market.“

Aave proposal stated

The zkSync Era is a general-purpose zero knowledge roll-up platform developed by Matter Labs, which helps implement EVM compatibility in its zk. Within three weeks of launch, the platform attracted more than $245 million in locked value.

AAVE Token Forms Bearish Technical Setup

The DeFi lender’s native token formed a bearish pattern called the descending triangle.

The descending triangle is a bearish continuation setup with a falling resistance line that caps upside attempts and a flat support that prevents declines. The height of the triangle’s thickest section determines the price target in a descending triangle setup.

The pattern gives AAVE prices a breakdown target nearly 74% below its current price levels to reach $21.4 before recovering.

Also Read: Bitcoin Whales Under Pressure As BTC Price Sinks Below $30K

Meanwhile, the Aave token’s price dropped nearly 5% to form a daily low near $80 on April 17. The pullback occurred after the token failed to move above a multi-week descending trendline resistance near $84.3.

If the downtrend continues, AAVE price might drop to its 200-day EMA (green wave) support near $79.5. Moreover, breaching the immediate support level could see the token dropping to $73.4 before recovering.

On the other hand, an uptrend might help AAVE price break above the trendline resistance and target the resistance near $90 before downside corrections pare gains.

The relative strength index for AAVE remains neutral, with a value of 58.1 on the daily charts.