The daily trading volume of the AAVE token reaches $218,250,321. With this volume the token ranks 5th place among the DeFi tokens. As for the locked funds amount in the project, the protocol remains one of the most popular in the DeFi space, firmly fixed above the mark $1 billion.
The trading week on the AAVE market passed with high volatility. Not allowing the price to correct enough after the rapid growth on 5 November, buyers continued to put pressure. Accordingly, from 5 to 10 November, the price increased by 155% and from 12 to 20 November by another 55%:
As we can see, the nature of AAVE price growth is weakening. In our opinion, the reason for this is the high liquidity above $63. If we look precisely at the AAVE protocol token old chart – there is a logical explanation:
According to coingecko.com, a local price reversal began in the range $75-82 in August, leading to the fall by 65%. This is one of the largest rates of fall among the DeFi tokens during the correction period. Restoring their positions and re-testing this range in just 15 days speaks of the huge price volatility, which can be equated to UNI, YFI, YFII. In addition, the orange marker highlighted the AAVEBTC pair chart. The large gap between these charts shows that the appreciation of the AAVE against the dollar may be speculative.
That is, after testing the target we wrote about in the previous article buyers may not be ready to firmly keep the price in this range. This can lead to the same sharp fall. So it is time to talk about the most likely scenarios.
AAVE price movement scenarios
For a positive scenario in the AAVE market, it is necessary to continue BTC price growth or at least its consolidation it on the spot. The second important condition – buyers need to keep the range $63-67. This range can be a springboard for continued price growth to $90.
However, given the overbought of the entire crypto market and bad for the continued growth weekly candle closing – it is worth considering the negative scenario. In case losing the range $63-67, the critical point for buyers will be at $52. The chart clearly shows how during 7-12 November, buyers boldly repulsed all sellers’ attacks on high volumes. Thus they won the continuation of the trend to $82.48.
Therefore, in our opinion, next week may be a week of initiative change in the market. This can be a good check on buyers and clarify what is behind the previous active AAVE price growth.