Amid a broader crypto market rally, Aerodrome Finance (AERO) saw a strong rebound, erasing most of its December losses. The altcoin remained stable at the $0.40 support level and climbed to a local high of $0.59 before easing slightly.
At the time of writing, AERO was trading at $0.558, a daily gain of 18.75%. This rise was supported by a 70% increase in trading volume and a 17% increase in market capitalization, signaling stronger on-chain activity.
Dip Buyers Drive Aerodrome Finance Recovery
After AERO broke the $0.4 support a few days ago, the team stepped in with buybacks, enticing buyers to come back. Aerodrome Finance has purchased and locked up a maximum of 940,000 AEROs under its market-aware programmatic buyback model.
The move prompted other market participants to step in to buy the altcoin at a discount.
As such, buyers returned to the futures and spot markets. On the spot side, the altcoin recorded 27.1 million buying volume versus 24.2 million selling volume, at the time of publication.
Source: Coinalyse
For this reason, the marker recorded a positive Delta of 2.9 million, a clear sign of an aggressive accumulation of spots.
Furthermore, exchange activities also echoed this accumulation trend. According to CoinGlass, one-time outflows from the airfield jumped to $4.06 million, while inflows fell to $2.9 million.
Source: Coinglass
As a result, the altcoin’s Spot Netflow decreased by 421% to -$1.16 million, suggesting increased accumulation. Often, increased spot purchases increase scarcity, which in turn accelerates bullish momentum, leading to higher prices.
Futures Sentiment Turns Bullish
Open Interest (OI) jumped 32% to $35.4 million at the time of writing, while derivatives volume jumped 92% according to CoinGlass data.
When OI and volume increase in tandem, it signals increased participation in the futures market, whether by taking short or long positions.
Source: CoinGlass
Along with this, significant capital was deployed into futures contracts, which generated $37.6 million in inflows.
Meanwhile, AERO’s Long Short ratio jumped to 1.0, indicating higher demand for long positions. The increased demand for long positions suggests that investors were optimistic and anticipated more gains.
Can AERO’s momentum hold?
Aerodrome Finance rallied as buyers stepped in, bought the dip and successfully defended a key support level.
As a result, the altcoin’s relative strength index (RSI) jumped to 54 and then fell to 50 at press time, indicating strong buyer momentum.
Likewise, AERO surged above its short-term moving average, EMA20, suggesting strong bullish momentum.
Source: TradingView
Notably, the altcoin was testing the EMA50 at $0.61, a move that could signal trend strength and its continuation if successful. If buying pressure continues, AERO will reverse these levels and target $0.73.
Conversely, if sellers cash out, the altcoin could retrace and fall back below $0.5.
Final Thoughts
- AERO rose 18% to $0.63 after successfully defending the $0.4 support level.
- Dip buyers entered the spot and futures market, prompted by the recent token buyback.
