Venture capitalist Arthur Cheong believes a decentralized finance (DeFi) altcoin could be gearing up for a massive breakthrough.
The CEO of DeFiance Capital tells his 176,400 followers on social media platform X that several factors signal optimism for lending platform Aave (AAVE).
It suggests that Aave’s open interest (OI), which is the total number of derivative contracts outstanding for a given asset, may have reached its lowest level following a sharp decline last month.
“The price of AAVE is holding up very well despite the leverage exerted on criminals in recent weeks:
1. Open interest at 30-day low, down 50% from September 11.
2. Negative financing rate.
Prepare it very well for the next stage of the rally.
A negative funding rate means there are more short positions than long positions on AAVE, which some traders perceive as a bullish indicator.
He also suggests that former President Donald Trump using Aave for the launch of World Liberty Financial, his new DeFi crypto project, could be a bullish catalyst.
“If you tell me that in 2020 we will have a former and potential future President of the United States who will support launching a separate instance on Aave, even the biggest DeFi bull wouldn’t believe it. But here we are. “We tend to overestimate the short-term effect of a technology and underestimate its long-term effect.”
Last month, he said Aave appeared to be breaking out of a multi-year consolidation pattern on a weekly time frame.
“AAVE is trading at the highest level since May 2022 and appears to be emerging from a two-year consolidation pattern. Expect ATH recovery (all-time high) to further solidify DeFi Renaissance.
Aave is trading at $148.88 at the time of writing, up 7.4% in the last 24 hours.
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