Altcoins could be put to a real test.
On the charts, most large-cap coins remain near key support levels, and the Altcoin Season Index (ASI) has not moved much, showing that lingering fear, doubt, and uncertainty have not pushed money into altcoins.
Aave (AAVE) bucks this trend. It gained 7.5% on March 2, making it one of the best performers, and is now approaching the $120-130 zone, a range it has failed to cross since early February.
Source: TradingView (AAVE/USDT)
Naturally, the question arises: will she finally make it through?
According to AMBCrypto, AAVE’s rally up to $120 resistance last week turned into a bull trap. The momentum failed to follow through, triggering liquidations of long positions as the market moved against traders’ bets.
Adding to the caution, capital rotation into altcoins remains subdued despite ongoing FUD. Instead, the smart money exited their positions, with one investor depositing 42.5K AAVE tokens in the last 10 hours alone.
Therefore, the pattern suggests that the altcoin could form another bull trap. As smart money exits positions and capital rotation into altcoins remains subdued, a breakout beyond $130 appears difficult to sustain.
This begs the question: Is AAVE’s more than 7% rally simply short-term momentum, or could the recent approval of a major governance vote create divergence strong enough to decouple it from the broader market?
The AAVE rally accelerates
Technically, every network needs capital to support its long-term growth.
The AAVE notably follows this trend with its “Will Win” proposition. After passing its first governance vote, $42.5 million will be allocated to fund Aave Labs, with all revenue returning to the DAO treasury.
This comes at a pivotal moment. On-chain momentum is strong and Santiment recently ranked AAVE as the second most active project in terms of development.
In this context, the approval of $42.5 million allows Aave Labs to further accelerate its development.
Source: Santiment
Meanwhile, on-chain accumulation strengthens the trend. One analyst noted that the monthly average of Binance’s top 10 releases increased from 147 to 232 AAVE, indicating growing investor confidence.
Together, this accumulation comes with a development-focused roadmap and $42.5 million in funding for Aave Labs.
This makes AAVE’s 7% rally more strategic than purely speculative, reducing the risk of another bull trap below $120 and allowing it to decouple from broader altcoin trends.
A breakout of AAVE beyond $130 seems likely and could happen sooner than expected.
Final summary
- AAVE is moving closer to the $120-$130 zone, supported by on-chain accumulation and smart money activity, reducing the risk of another bull trap.
- The “Will Win” proposition accelerates Aave Labs’ development, positioning the altcoin for a potential breakout beyond $130.
