AAVE's Modular Revolution: Can $370 Be Next?

AAVE, the native token of the leading DeFi lending protocol, has reclaimed the $300 price zone amid renewed market optimism fueled by the upcoming V4 upgrade. This strategic release aims to enhance AAVE’s position as a foundational infrastructure within the decentralized finance ecosystem and potentially unlock new avenues for growth in the DeFi sector. As of early September 2025, AAVE is trading around $322.60, with bullish indicators suggesting a path toward $370–$400, contingent on a decisive breakout above key resistance levels.

The V4 upgrade introduces a modular architecture through the Hub-Spoke model, which aims to address long-standing limitations of previous iterations. The Hub aggregates liquidity across chains while allowing Spokes to operate under different rules and risk parameters, enabling greater customization for diverse use cases such as real-world asset (RWA) integration and institutional-grade lending. This approach not only enhances capital efficiency but also fosters cross-chain interoperability, allowing users to collateralize assets on one chain and borrow on another within a single transaction. Such advancements align with growing demand for composable DeFi solutions and could position AAVE as a key player in multi-chain liquidity management.

Further strengthening its market appeal, the V4 update introduces a dynamic risk premium mechanism that adjusts interest rates based on collateral quality and market liquidity. This automated system, executed via smart contracts, ensures fairer borrowing costs and reinforces the protocol’s security. Additionally, the inclusion of smart account features streamlines user operations by allowing multi-chain asset management through a single interface, reducing friction and improving user experience. These improvements are expected to attract both retail and institutional users seeking efficient, flexible, and secure lending and borrowing solutions.

Market activity reflects positive sentiment surrounding the AAVE upgrade. The protocol’s total value locked (TVL) has surged to nearly $65 billion, surpassing many of its DeFi peers and highlighting AAVE’s dominance in the lending space. On-chain data shows open interest exceeding $430 million as of August 24, 2025, a six-month high, while 24-hour trading volume on major exchanges like Binance reached $27.1 million. This liquidity surge underscores increased market participation and investor confidence, particularly as the V4 launch date approaches.

Technical indicators also support the bullish outlook for AAVE. The token is currently above all major moving averages, with a 36% premium over the 200-day simple moving average. The RSI remains in neutral territory at 53.68, indicating room for further upward movement without entering overbought conditions. However, the MACD histogram shows bearish divergence, suggesting that any short-term gains may face initial resistance before gaining sustainable momentum. Traders and investors are advised to monitor the $340 level as a critical threshold for confirming the bullish case and unlocking higher price targets in the $370–$400 range.

While the upgrade has garnered widespread community support, it is not without risks. A failure to break above $340 could trigger a pullback toward the $275–$285 support zone, with further downside risk to $245 if the pivot at $319.93 is breached. Conversely, a strong breakout with above-average volume could validate the optimistic price forecasts and propel AAVE toward its 52-week high near $383.53. For now, the market is closely watching how the V4 upgrade unfolds, with many analysts expecting a positive impact on both price and TVL as the DeFi bull cycle continues.

Source:

[1] A detailed analysis of the AAVE V4 upgrade (https://www.bitget.com/news/detail/12560604933071)

[2] A detailed analysis of the AAVE V4 upgrade: Reshaping ... (https://www.bitget.com/news/detail/12560604934442)

[3] Aave (AAVE) Price Prediction 2025 2026 2027 - 2030 (https://changelly.com/blog/aave-price-prediction/)

[4] Aave (AAVE) - Technical Analysis - Cryptocurrency (https://www.investtech.com/main/market.php?CompanyID=99402667)

[5] AAVE Price Prediction: $370-$400 Target by September ... (https://blockchain.news/news/20250831-price-prediction-target-aave-370-400-by-september-2025-as)