AAVE Price Correction to $80 Gains Traction Amid $300M Liquidation Wave
The AAVE price witnessed a temporary ease from selling pressure on Monday’s trading session, registering a 3% rise to $94. However, as the pioneer cryptocurrency, Bitcoin struggled to sustain above $60000, the altcoin market witnessed an intense overhead supply, signaling the potential for a prolonged downfall.
AAVE Price Loses Key Support As Massive Liquidations Sweep the Market
Aave, a prominent DeFi lending protocol, witnessed its highest-ever liquidation of $300 Million last week as the ETH price dipped 25%. The downward trend, bolstered by a broader market sell-off, triggered major liquidations of stablecoin loans collateralized by wrapped staked ETH (wstETH). Amid the unprecedented event, the AAVE price breaks below $100 support.
However, the recent tweet from Intotheblock highlights the volatility that also benefited protocol by generating $6 million in profits for the Aave DAO. The event underscores decentralized finance platforms’ risks and robustness in managing extreme market conditions.
Aave witnessed its largest-ever liquidations this week, with nearly $300M liquidated. Most liquidations stemmed from stablecoin loans against (wst)ETH collateral as ETH dropped by 25%.
The protocol remained strong, adding $6M in profits to the Aave DAO. pic.twitter.com/KPBubM0t9C
— IntoTheBlock (@intotheblock) August 10, 2024
In addition, the AAVE network has experienced a notable 28.83% rise in short-term traders over the past month. This surge suggests an influx of new users and short-term speculators entering the market, likely attracted by recent market volatility and opportunities for quick gains.
AAVE Price Poised For Prolong Downfall
The AAVE price witnessed a high momentum correction amid the recent market sell-off, displayed by a V-top reversal in the daily chart. The bearish turnaround plunged the asset from $118 to $93.7, accounting for a 20.6% loss.
The falling price recently plunged below the daily Exponential moving averages (20, 50, 100, and 200), indicating sellers are strengthening their grip over the altcoin. If the sustained selling, the AAVE price could plunge 14% to hit the long-ascending trendline at the $80 mark.
This dynamic support since September 2023 creates a high accumulation, and a break below it could trigger a major downfall.
On the contrary, the falling AAVE price is backed by decreasing volume action, indicating traders’ lack of interest in entering short positions. This signal often leads to a reversal from major support or resistance.
Therefore, if the coin price sustains above the support trendline, buyers could counterattack and regain the $100 mark.
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