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Aave Jumps 25% as Golden Cross Approaches

Aave Jumps 25% as Golden Cross Approaches

AaVE surges more than 25% as a golden cross pattern forms, signaling potential bullish momentum and renewed investor interest in the DeFi token

Today, AAVE experienced a 25% increase in value, which was attributed to increased trading activity and a general sense of optimism within its ecosystem.

On the afternoon of May 20, Asian time, AAVE reached an intraday high of $269, its highest level since February. This achievement places it among the top-performing cryptocurrencies in the market at the moment. AAVE has increased by over 132% since its April low.

The increase coincided with an increase in trading volume. Today, AAVE experienced its most active day since early March, with transactions exceeding $800 million, as data from crypto.news indicates.

In the interim, AAVE’s futures open interest reached a record high of $569 million, indicative of the robust demand from derivatives traders. The market’s majority is still betting on further upside, as evidenced by the positive funding rate that has persisted for two consecutive weeks. Short traders are presently receiving payments from long traders.

Traders appeared to appreciate the GENIUS Act’s recent passage of a critical procedural vote in the U.S. Senate. The measure suggests a regulatory framework for stablecoins, a crucial area for DeFi protocols such as Aave.

The possibility of regulatory clarity could potentially foster increased institutional participation and confidence throughout Aave’s ecosystem, given its dependence on stablecoins such as USDC, DAI, and its native GHO coins.

AAVE was also bolstered by TVL’s confirmation of its status as the premier DeFi protocol. DeFiLlama reports that its total value secured has increased by nearly 40% in the past month, reaching $40.7 billion, significantly higher than Lido’s $23.3 billion.

Real revenue is being generated as a result of this expansion. Year-to-date, AAVE has generated more than $250 million in fees, making it one of the most profitable protocols in the industry.

Momentum on the technical front is also being matched by a 57% increase in daily active addresses over the past two days.

Aave Jumps 25% as Golden Cross Approaches
Source: Santiment

Concurrently, its weighted social sentiment has also shifted to the positive, indicating that market participants are becoming increasingly optimistic about AAVE’s short-term outlook.

Potential platinum cross in the process of being developed
The Aroon Up indicator is 100% on the 1-day/USDT chart, while Aroon Down is 0%, indicating that bullish momentum is the dominant force. The Chaikin Money Flow Index is currently reading 0.26, indicating increased capital inflow into the token.

Aave Jumps 25% as Golden Cross Approaches
AAVE price, Aroon and CMF chart, May 20 | Source: crypto.news

A golden cross is imminent on the daily chart, as AAVE’s 50-day and 200-day moving averages approach a crossover, which is frequently regarded as a favorable signal.

Aave Jumps 25% as Golden Cross Approaches
AAVE 50-day and 200-day EMA chart, May 20 | Source: crypto.news

At $271.35, the token is approaching the 61.8% Fibonacci retracement level. A clean breakout above this level could open the door to the 50% retracement level at $347.19, approximately 30% higher than current levels.

Conversely, in the event of a pullback, the $226.45 level is a critical support level that could function as a reliable rebound zone before the resumption of the uptrend.

At the time of publication, the price of AAVE was approximately $267 per coin.

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