AAVE Token Surges 30% in Four Days Amid Bullish Market Sentiment

AAVE, a decentralized lending protocol, has seen a remarkable 30% surge in its token price over just four days. This significant increase has sparked interest among investors and analysts, who are now examining the factors behind this growth and the potential future trajectory of the token.

The recent price surge can be attributed to several key factors. Firstly, the overall bullish sentiment in the cryptocurrency market has played a crucial role. As the market gains momentum, investors are increasingly seeking high-potential assets, and AAVE has emerged as a strong candidate. Secondly, the protocol's recent developments and upgrades have enhanced its functionality and security, making it more appealing to users and investors. Additionally, the growing adoption of decentralized finance (DeFi) platforms has contributed to the increased demand for AAVE, as more users leverage its lending and borrowing services.

Technically, this surge follows a three-week consolidation phase where AAVE formed a short-term range between $240 and $280 before breaking to the upside. On June 6, AAVE tested the range low near $240, which acted as a strong support level. This retest marked the beginning of a powerful uptrend, further supported by broader market tailwinds, most notably, Bitcoin’s rally from $105.5K to $110.5K.

Currently, AAVE is trading at a market price of $312.23, reflecting a 7.60% surge in the past 24 hours and an 18.30% increase over the past week. Key resistance levels are looming at $320 and $332, and a pullback to $285–$300 could offer a prime buying opportunity before the next leg up.

AAVE’s breakout is part of a larger bullish structure that began forming after the token bottomed out in April. After losing all the gains from its November–December 2024 surge (from $125 to $399), AAVE reversed course and broke a bearish market structure on May 8, beginning a slow but steady climb. The range formation between $240 and $280 helped the token build liquidity, allowing traders to reset momentum and accumulate positions. Once the $240 support held firm, buyers rushed in, fueling the current surge.

Indicators confirm this strength. The On-Balance Volume (OBV) shows sustained demand, and the Relative Strength Index (RSI) continues to signal bullish momentum, with no signs of bearish divergence to date. According to Coinglass liquidation heatmaps, a significant cluster of short liquidations was visible around the $280 and $295-$300 levels. AAVE’s recent price action wiped out these shorts, adding fuel to the rally.

The 1-month heatmap highlighted areas of liquidation interest at both extremes of the former range — levels that AAVE has now cleared. In the short term, price action is eyeing $320 and $332, with possible pauses as traders take profit or new shorts enter the market. Despite the rapid price ascent, analysts suggest a retest of the $300 or $285 zones could offer attractive entry points for swing traders. These areas coincide with the former range highs and would allow momentum to cool before another leg upward.

If buying pressure persists and Bitcoin continues its bullish momentum, AAVE could realistically test the $320-$332 resistance zone and potentially break higher, with $350 and $399 as the next medium-term targets. The protocol's innovative features, such as its flash loan functionality and liquidity mining programs, have positioned it as a leader in the DeFi space. As the adoption of DeFi continues to grow, AAVE is well-positioned to benefit from this trend and potentially achieve even greater heights. However, investors should remain vigilant and stay informed about the latest developments in the cryptocurrency market to make informed investment decisions.