Aave Token Surges 118% Driven by Ecosystem Developments

AAVE, the native token of the decentralized lending platform Aave, has experienced a significant surge in value over the past six weeks, climbing 118% from $121.75 to $265. This rally has been driven by a combination of technical factors and ecosystem developments within the Aave protocol.

The Aave team has made notable strides in expanding its ecosystem. On May 12, the Aave DAO approved the expansion of Chainlink’s Secure Value Recovery (SVR) mechanism, which increased TVL coverage from 3% to over 27%. This enhancement strengthens the protocol’s risk mitigation capabilities and positions Aave as a more secure lending platform. Additionally, on May 19, Aave v3 was launched on Aptos, marking its first deployment on a non-EVM chain. This cross-chain expansion taps into a new user base and enhances liquidity flexibility for developers and lenders operating beyond Ethereum.

Technical analysis shows that AAVE’s price has risen rapidly since April 9, forming a parabolic curve. The token is currently testing a critical resistance zone between $285–$300, which aligns with a prior distribution level from February. While the price is trading at the upper band of its Bollinger channel, indicating strong buying momentum, it also suggests that the price is extended and may precede short-term pullbacks or consolidation.

Momentum indicators reflect a market that may be nearing a pause or pullback. The RSI sits at 74.88, entering overbought territory for the first time in this rally. The MACD remains in a bullish crossover, but the histogram bars are narrowing, signaling that while momentum remains positive, it is weakening. The OBV has flattened, indicating that buying pressure has stalled, and the Volume Oscillator is down from its peak earlier in May, suggesting a waning pace of new inflows.

On-chain metrics reveal that 81.92% of AAVE tokens are currently “in the money” based on volume-weighted break-even data, with only 11.95% of tokens in loss. This reduces the potential for aggressive sell-offs. Additionally, 83.44% of active users are in profit, showing that traders who are using the protocol or actively trading aren’t under pressure to exit. These figures indicate that most holders are sitting on gains and not rushing to exit, supporting the idea that pullbacks could be shallow unless market sentiment changes dramatically.

If AAVE breaks and closes above $300 with strong confirmation, the next target lies at $340–$360. However, if the rally stalls, support lies at $240, followed by $210, near the 20-day EMA and midline of the Bollinger Band. As of now, the daily structure remains bullish, but momentum indicators suggest caution as the price nears exhaustion levels. Traders should monitor the $285–$300 zone closely for either breakout continuation or reversal signals.