After a 44% pump in 48-hours, Is it time to buy AAVE again?

AAVE’s movement was particularly lackluster since February but an important update and a 44% pump later, the DeFi altcoin demanded attention from market participants.

Development Activity Spikes

AAVE’s V3 update went live on 16 March, featuring cross-chain transactions, lower gas fee, and increased network efficiency. As a result, the development activity tracker on Santiment soared to a 2-wk high, outlining an important period for the token’s ecosystem.

Traders took the opportunity to make bullish bets amid the increased activity. Between 14-19 March, AAVE’s price climbed by 44% on the chart and hit a 1-month high at $166.

With AAVE’s near-term lock, loaded, and accounted for, how does its long-term movement entail? A majority of factors suggested that the DeFi token was on course for a continued rally.

Daily Active Addresses and TVL

Since slipping to a near 6-month low on 25 January, AAVE’s Total Value Locked (TVL) has gradually returned to form. Over the past week, the TVL has recovered by 13% as per blockchain aggregator Defi Llama – the second-highest gainer for the week after Lido. In most cases, a rising TVL is a bullish indication as it denotes rising interest in the staking, lending, and liquidity mechanisms for a protocol.

This turned attention to those addresses that had not locked their AAVE tokens and there was a stark difference in sentiment. The DAA count has been unimpressive throughout February and March, indicating a lack of volatility as most addresses have been dormant. Although the past week did suggest that addresses were interacting with their AAVE balance, the figures were still lower than those during the second half of 2021.

However, the same did not seem to deter Ethereum whales, who were also taking note of AAVE’s movement. Over the past 24 hours, AAVE was among the top 10 purchased tokens and amidst the most used smart contracts by the top 100 Ethereum wallets.

AAVE Daily Chart

Finally, AAVE’s price was looking bullish after breaking away from a 3-month long falling wedge. Reliable support was available at $112 and bulls were looking strong as the price headed towards an important resistance between $180-$192. Meanwhile, counter-pressure from sellers is expected to be at a bare minimum. Data from IntoTheblock showed that profit-taking was not a serious threat, with 82% of holders still making a loss despite AAVE’s recent price surge.

Conclusion

Save for a weak DAA count, AAVE was looking strong on most fronts. Whale purchases and a recovering TVL were favorable developments and with sellers expected to be at bay, it is safe to say that the AAVE hype may continue for the next weeks to come.