The AAVE price has crashed over the past few weeks, joining other cryptocurrencies in a steep bear market. The token has retreated to the crucial support level at $200, down almost 50% from its highest level this year. This article explains why the AAVE token will surge in the coming weeks.
AAVE Has Numerous Catalysts
AAVE, the second-biggest player in the decentralized finance industry after Lido DAO, has numerous catalysts. First, the network has just expanded to the Sonic Chain, formerly known as Fantom, and attracted over $33 million in assets. This addition has brought its total value locked (TVL) to over $18 billion, a trend that may continue in the near term.
Second, AAVE is one of the most profitable players in the crypto industry. It has made over $148 million in fees this year, making it the fourth most profitable player in DeFi, like Jito, Uniswap, and Lido Finance.
Third, AAVE has just made a big proposal that will reward holders. These proposals include ending the slashing for AAVE stakes, terminating LEND, and transferring 320K AAVE tokens to the protocol.
READ MORE: Top 3 Altcoins to Buy Ahead of Trump Crypto Summit
The other major proposals in the network include purchasing $1 million worth of AAVE tokens approximately every 6 months. Those repurchases will help reduce the number of tokens in circulation and make the remaining tokens more valuable due to scarcity.
This will happen as the number of AAVE tokens in circulation dwindles. CoinGlass data shows that the AAVE tokens in exchanges have dropped to 2.21 million, down from December’s high of 2.68 million. Falling balances are a bullish sign since they indicate that many AAVE investors are not selling their coins.
Further, AAVE has proposed allocating 50% of the revenue generated to GHO to anti-GHO, with 80% of the funds moving to AAVE stakers.
The AAVE Price Technical Analysis
The weekly chart shows that the AAVE coin price peaked at $396 and then retreated. This was important since it was the highest swing in September 2021. It has formed a cup and handle pattern, with the current retreat being the handle section.
The AAVE price has remained above the 100-week Exponential Moving Average, indicating that the bullish view remains intact. It stays between the 61.8% and 78.6% Fibonacci Retracement levels.
The AAVE token has dropped to the bottom of the Murrey Math Lines’ trading range. Therefore, the coin is likely to rebound and retest the strong pivot point at $396, representing a potential 92% increase from the current level.
READ MORE: Here’s Why Pi Network Coin Price May Surge 85% Soon
