Aave is among the largest DeFi platforms that recently attracted attention due to the large number of ongoing whale transactions.
Two whales pulled off 16,592 AAVE tokens from their wallets, worth $2.22 million. This is the first time they have shifted a large amount of AAVE.
Aave Price Sees Significant Increase
Following the whale withdrawal, Aave experienced a notable price surge. Over the past 24 hours, the token has risen by more than 23% for the month. Its current value is standing at $125.82.
This price increase comes despite a reduction in trading volume, which is down 57.20% over the same period. The 24-hour trading volume sits at $218.91 million.
This is a considerable drop but still indicative of strong market activity. Aave’s market capitalization also remains solid at $1.87 billion, positioning it as the 38th largest cryptocurrency by market cap.
With a circulating supply of approximately 14.93 million AAVE, the token’s performance has been strong despite broader market volatility. However, the price rise, coupled with the whale activity, suggests that market dynamics are shifting.
Falling Wedge Pattern Hints at Potential Breakout
A closer look at Aave’s technical charts reveals that the token is forming a falling wedge pattern. A falling wedge is generally considered a bullish signal in technical analysis.
It indicates a possible reversal from a downtrend to an uptrend. Traders often interpret this pattern as a sign that a breakout may be imminent, which could further propel Aave’s price upwards. The wedge pattern began forming in late August.
As of now, Aave’s price remains confined within the narrowing boundaries of this formation. With the current price resting near the lower end of the wedge, analysts are predicting that Aave could soon break out.
This is especially true if additional whale movements or market-wide bullish trends support the price. However, consolidation is still expected in the near term. The volume oscillator shows a decline of 23.19%, reflecting a slowdown in trading activity.
This reduction in volume could indicate that the token is gathering momentum before making its next major move. It is also worth noting that whale movements may, at times, cause volatility. This is due to the reaction of small investors to the actions of the large players.
In this case, therefore, the effect of the withdrawals elicited by the powerful image of the whale, on one hand, seems to have started well. However, the ultimate effects of these withdrawals are yet to be ascertained.
Market Sentiment Remains Cautious: What Next?
While Aave’s price has risen in recent days amid recent stackings by whales, the sentiment formed around this asset remains rather mixed. Further, the trading volume has decreased, which indicates that most traders are reluctant to make further decisions while waiting to see what the market will do in relation to the whale and technical trading movements.
Its fundamentals, however, are still robust, as is seen with Aave. As of press time, it had a total value locked or TVL of $10.93 billion. This shows that investors still have faith in the platform.
Whale movement has increased, and technical indicators are also pointing toward a breakout. This means Aave is at a crucial point right now. Hence, supported by the falling wedge pattern, lower trading volume, and whales’ outflow, a consolidation might happen in the short term.
