Here’s Why AAVE Price Could Surpass $370

Key Insights:

• If AAVE price reclaimed $370 on the daily candle, it could set up for a massive rally.
• The best USDC borrows on Base were executed using the Aave Protocol.
• Aave Protocol surpassed $70 billion TVL, including staking, pools, and other products.

After the Friday, August 22nd surge, the crypto markets entered a slow weekend with minimal gains or negative price changes. Aave Protocol (AAVE) was no different. The DeFi coin was down about 0.5% in the day but the monthly change was a 22% increase per CoinMarketCap data.

Similarly, other DeFi tokens like Chainlink (LINK), Uniswap (UNI), and Stellar Lumens (XLM) declined on the day. However, their correction was not as pronounced as in the memecoin sector.

The sentiment and market direction across the board had made a U-turn from last week’s woes. Having said that, AAVE price displayed all the signs that it could reclaim and rally beyond the $370 mark.

AAVE Price Eyes $370 And Beyond

The weekly chart for AAVE price token displayed immense bullish action since the April to May lows. Since then, only four weekly candles have closed in red for the altcoin. The massive green candle that reclaimed $190 indicated a structure change as it closed above the weekly lower high.

As of press time, AAVE Protocol token was attempting to break above the $370 mark, representing a key hurdle to price appreciation. It could set the leading DeFi token on an unprecedented rally after successfully staying above this zone.

Alternatively, the AAVE price could start a bearish reversal at this zone. One hint for that was the instant rejection when the price wiggled above the zone. Additionally, this same zone led to a bear market previously. It held price below it highs seen in mid-December 2024. This reaction was reflected across the whole of the cryptocurrency market.

Despite the risk of entering another bear-controlled market, AAVE’s developments aligned with the market structure that was screaming bullish. Here are some of the reasons why the price could surpass $370.

AAVE Protocol Reduces Borrow Costs

The protocol’s founder, Stani Kulechov, continued advocating for users to embrace AAVE crypto instead of banks. The altcoin has been rising up the ladder among top US banks regarding deposits, as noted in earlier analysis of The Market Periodical. From its position as a bank, but one that is decentralized, it doubled as the protocol for borrowing.

Per Stani Kulechov post, USDC lending on Base chain was dominant on the Aave Protocol. At the time, the total USDC supplied was $268.69 million with an APY of 6.74%. The total borrowed was about $222 million with a variable APY of 5.76%.

Kulechov said that was an extra 25 basis points (bps) for CBTC collateral. This meant reduced borrowing costs as compared to other avenues offering similar services. Kulechov reiterated his bold statement writing, “Stop paying an extra 2% on your borrowing costs on other venues.”

With reduced borrowing costs, the AAVE would get more users who would rush for this cost-saving development. Usually, more users translate to increased demand, which drives asset prices.

AAVE Crypto TVL Hits Record High

Moreso, AAVE’s intended purpose was unfolding under the crypto community watch. Per data from DefiLlama, the TVL hit a new milestone of $71.15 billion. The value included AAVE used for staking, borrowing, bribes, vesting, and double-counting.

Ethereum (ETH) led with $63 billion in TVL by chain. It was followed by Arbitrum One (ARB), Base and Avalanche (AVAX), accounting for value between $1B and $2B.

In summary, AAVE needed to break the $370 level to rally fully. Interestingly, the altcoin was backed by real data drivers like the reduced borrow costs and rising TVL and deposits.

Disclaimer

This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.