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$AAVE price rebounded for the second consecutive day, erasing some losses from last week, as smart money investors bought in and exchange balances declined.
$AAVE ($AAVE), the largest lending protocol in the crypto industry, climbed to $341 on Monday, Dec. 23, marking a 25% increase from its lowest level last week. This recovery pushed the token’s market cap to over $5 billion.
The rally was not driven by any specific $AAVE-related news but seemed tied to the broader rebound in DeFitokens. Curve DAO Token (CRV) rose by 10%, while Raydium (RAY) was up by 5%. Other leading DeFi tokens, such as Chainlink and Lido DAO, also saw upward momentum.
$AAVE’s performance was further supported by its strong fundamentals. It remains the second-largest player in the DeFi industry, managing over $19.6 billion in assets across chains like Ethereum, Polygon, and Arbitrum.
Exchange balances of $AAVE tokens continued to decline, indicating that investors are holding rather than selling. The total tokens held on exchanges fell to 5.51 million, a 2.27% decrease from the previous week. A reduction in exchange balances is often viewed positively in the cryptocurrency market.
Nansen data also highlighted increased activity among smart money investors, with the number of smart money $AAVE holders rising to nearly 50, up from fewer than 30 in June. Smart money balances now exceed 430,000 tokens, up from a year-to-date low of under 340,000. This accumulation is generally considered a bullish signal for a cryptocurrency.
Donald Trump’s World Liberty Financial has become a big buyer of the $AAVE token. It owns over 6,000 coins valued at over $2 million, making it the fourth biggest part of its portfolio after Ethereum, Bitcoin, and USDC. The company also wants to build its DeFi network on top of $AAVE’s platform.
$AAVE price technicals point to more upside
Technicals suggest that the $AAVE token has more upside to go in the next few days. The coin formed a hammer candlestick chart pattern on Dec. 20 as cryptocurrencies fell. A hammer forms during a downtrend and comprises a long lower shadow and a small body.
Additionally, $AAVE has found support at its 50-day moving average and is approaching the weak, stop, & reverse level of the Murrey Math Lines. This suggests that the token may continue rising, with the next significant resistance level to watch being $375.