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- AAVE has broken out of a 2-year price range and could target $200.
- AAVE has outperformed its lending sector rivals and major blue-chip DeFi tokens.
Aave (AAVE) has been an outlier on the price charts, defying the overall market headwinds that derailed most assets in the early part of the second half of 2024. It has slightly outperformed even Bitcoin (BTC) on a year-over-year (YTD) basis.
BTC is up 42%, while AAVE YTD returns stand at 46% at press time.
Arthur Cheong, founder of crypto VC DeFiance Capital, projected DeFi token would reclaim its ATH (all-time high) after facing a range breakout.
“$AAVE is trading at its highest level since May 2022 and appears to be breaking out of a 2-year consolidation pattern. Expect the ATH recovery to further solidify the DeFi renaissance.”
AAVE is optimistic about the outlook
To put things into context, AAVE debuted in 2020 and reached an ATH of $668 at the height of the last bull cycle in 2021. The recent breakout of the 2-year price range could take the altcoin to $200 in the medium term.
Source: AAVE/USDT, TradingView
At the time of writing, the alt was valued at $158, suggesting that a potential gain of 26% was likely if AAVE recovery has been extended to $200.
Despite the overbought conditions highlighted by technical chart indicators, the DeFi renaissance mentioned by Cheong is accelerating.
A recent Bernstein report highlighted the resurgence of the DeFi space and falling US bank rates as a positive catalyst for demand for DeFi yield.
The report highlights AAVE’s strong growth potential and solid fundamentals, indicating that it is poised to benefit from likely demand.
Among its peers in the lending sector, AAVE had the most active loans, at $7.35 billion, followed by Manufacturer (MKR) Spark protocol.
Source: Token Terminal
This was nearly double the amount borrowed of around $3.4 billion at the start of 2024. This highlighted the growth of the protocol, but the remarkable performance was also evident on the price charts.
So far in Q3, AAVE is up 60%, while the rest of the lending sector and top-tier DeFi tokens as a whole have been in the red.
MKR and Uniswap (UNI) decreased by 38% and 28% respectively. Lido (LDO) experienced the biggest decline, down 44% over the same period.
Source: AAVE vs DeFi tokens, TradingView
Interestingly, AAVE has decoupled from the rest after the early August sell-off. Kinji Steimetz, research analyst at Messari related AAVE Outperforms Following Recent Protocol Fee Change proposal and a reduction in excess supply.
