AAVE, the governance token of the decentralized finance (De Fi) platform Aave, is showing signs of a potential recovery after a recent dip in its price. The key factor driving this resurgence is the renewed demand from whales, which is significantly influencing AAVE’s price action. Whales, or large holders of AAVE, have been accumulating tokens in the last two weeks, drive speculation about a possible price rally.
According to data from IntoTheBlock, whales held 8.92 million AAVE tokens as of January 1, which represented 55.75% of the total supply. This figure has since increased to 9.07 million tokens, or 56.69% of the total supply. The fact that whales now control more than half of AAVE’s circulating supply suggests they could have a major impact on the token’s price in the coming weeks.
Retail Investors Join the Rally
While whales are making the most significant impact, retail investors are also participating in AAVE’s recovery. Retail holders have increased their positions from 3.03 million AAVE to 3.05 million during the same period, signaling that there is broader market interest in the token. This combination of whale and retail activity could provide the momentum AAVE needs to push past recent resistance levels.
Bullish Momentum Builds as Bears Lose Steam
AAVE’s price has seen a positive shift recently, bouncing back by approximately 13% from its lowest point on January 13, reaching $290.75. The money flow indicator (MFI) has been trending upwards since January 8, suggesting that liquidity is returning to AAVE. This shift indicates that bearish sentiment may have run its course, and bullish demand could be setting the stage for further price appreciation.
Derivatives and Spot Markets Show Robust Demand
On-chain data highlights the resurgence of demand for AAVE across both derivatives and spot markets. AAVE’s derivatives volume surged to $1.04 billion, marking a 61.05% increase in the last 24 hours. This surge in trading volume points to strong market activity and suggests that AAVE is regaining investor confidence.
Open interest in AAVE derivatives also reached a peak of $310.50 million, reflecting an increase of 6.95%. This indicates that traders are betting on continued upward movement for AAVE.
In the spot market, AAVE’s inflows have turned positive, with spot inflows reaching $5.09 million, the highest in the last two weeks. The shift from outflows to inflows on January 11 signals that investor sentiment is shifting in favor of AAVE, further reinforcing the bullish outlook.
Can AAVE Reach $300?
The combination of whale accumulation, increased trading volume, and a positive shift in market sentiment suggests that AAVE could be on the verge of a breakout. If demand continues to build, AAVE may have the momentum needed to break the $300 mark. However, sustained demand will be key to maintaining this bullish momentum.
The latest data shows that AAVE is at a crucial juncture. With the whales continuing to accumulate and retail investors to showing interest, AAVE’s price may be poised for further gains. The real question are remains: can the demand continue, or will the market face another pullback? Only time will tell, but the outlook for AAVE appears promising in the short term.
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