Aave (AAVE) On-chain Activity Spikes, How This May Affect Price Action?

Key Insights

• Just like the rest of the market, AAVE is overall bearish from a long-term perspective.
• After falling from a $450 high in November 2021, the cryptocurrency has plunged 87.5% and now trades at $83.21.
• Over the short-term perspective, AAVE has been in a symmetric triangle and has been testing this formation's upper and lower supports for five months now, since May.

The Aave protocol is a decentralized finance (Defi) protocol that enables the lending and borrowing of cryptocurrencies and real-world assets (RWAs) between its users without needing a centralized middleman. The borrowers have to repay their loans with interest at the end of the lending period, and the lenders earn from the interest collected.

AAVE was in the news this week after their announcement that, alongside Uniswap, the Aave protocol would launch a deployment on Polygon's zkEVM testnet.

Aave was also in the news because of its extensive and highly impressive roadmap involving a V3 protocol deployment on the Ethereum mainnet, a stablecoin launch, and even an Aave debit card.

In recent news, however, the data collection and blockchain monitoring platform, Santiment, has pointed out something interesting about Aave's on-chain metrics.

AAVE's On-chain Address Activity Spikes

In a tweet, the crypto intelligence platform Santiment pointed out that the address creation and address activity on the lending protocol have spiked and reached levels "not seen since mid-July."

Santiment also notes that these two metrics are key ingredients for massive price growth and may prove favorable for the cryptocurrency AAVE in the long run.

The platform notes that while there are worrying signs as regards the relationships between price and on-chain activity on cryptocurrencies across the market (including Ethereum), Aave is "trying to do something different" with its metrics.

The blockchain data aggregation platform also adds a twist to their verdict, saying, "If it will not be enough to keep the price, we dump"

Aave Price Outlook

Just like the rest of the market, AAVE's is overall bearish from a long-term perspective. After falling from a $450 high in November 2021, the cryptocurrency has plunged 87.5% and now trades at $83.21.

After falling from its last major lower-low of $255 in April this year, AAVE's price has consolidated, ranging between a $45 low and a $123 local high.

Over the short-term perspective, AAVE has been in a symmetric triangle and has been testing this formation's upper and lower supports for five months now, since May.

It is safe to say that the price of AAVE has an equal chance of rising to the upside or descending for a retest of the lower trendline.

The RSI on the daily chart shows relatively neutral conditions in support of the symmetric triangle.

The MACD also indicates that the bulls currently control the AAVE market. However, the indicator appears to be on the verge of a bearish crossover.

This would mean that the bears may be preparing for a takeover from the bulls. If the bears manage to wrestle control from the bulls, the price of AAVE is expected to fall about 15% from the $83.8 zone it now sits at to about $70.

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