AAVE’s rally may extend but the risk of a downside remains significant

AAVE’s rally may extend but the risk of a downside remains significant

October 26, 2023

By Michael Nderitu

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Aave enjoys strong network activity as the market experiences a bullish frenzy.

AAVE bears may get a chance to take the wheel as the bulls take a break following an intense week.

Now that the markets have been recovering after previously experiencing a low liquidity phase, DeFi demand is resuming. Aave [AAVE] has been benefitting especially in terms of utility and this is promising for its native token AAVE.

Recent market analysis revealed a surge in Aave’s network activity in the last two days. This didn’t exactly come as a surprise considering the soaring demand for cryptocurrencies as observed in the bullish outcome during the last few days.

The observation reflected a surge in the number of transactions which stood at its highest levels observed in the last two weeks.

The fact that Aave was experiencing strong network activity should technically fuel demand for AAVE. That appears to have been the case in the last few days given its robust rally.

Furthermore, last week we also observed a significant probability of AAVE breaking out of its wedge pattern. Fast forward to the present and that prediction was a bit too accurate.