Over the past year, Aave (AAVE) has seen significant growth, with its value almost tripling and its market cap increasing from $1.4 billion to $3.7 billion. This growth has made AAVE the most performing DeFi token, outperforming others with over $1 billion in market cap. Despite short-term bearish sentiments, AAVE’s sustained growth reflects strong investor confidence and adoption of the protocol.
In the short term, AAVE has experienced bearish sentiments, as evidenced by a decline in the ratio of daily on-chain transaction volume from profit to loss. This trend indicates that investors are selling at a loss, with fear dominating the market. Whales have also been selling, with large holders’ netflow turning negative, suggesting a significant capital outflow. Furthermore, long-term holders have seen their profit margins decline, leading to reduced market confidence.
Despite the short-term bearishness, AAVE’s continued growth over the past year suggests that the altcoin still has room for further growth. If bearish sentiments persist, AAVE could drop to $234, but if gains hold, the altcoin could reclaim $261. The strong performance of AAVE compared to other DeFi tokens demonstrates its potential for future growth amid market fluctuations.
