AAVE price pulled back for three consecutive days, with the losses accelerating on Friday as the crypto market crashed. It dropped to a low of $262, down by almost 20% from its highest point this month. This article explores the top three reasons why AAVE Coin may be the best crypto to buy today.
AAVE Price Has Strong Technicals
The first main reason why AAVE is a good altcoin to buy today is its strong technical indicators. The chart below shows that it has already formed a golden cross pattern, which happens when the 50-day and 200-day moving averages cross each other.
This cross is one of the most bullish patterns in technical analysis. The last time that AAVE formed a golden cross was in July last year, and the token jumped by 312% afterwards.
AAVE’s pullback may be temporary since it happened after it jumped to $322, a notable level since it was along the 23.6% Fibonacci Retracement level. It is normal for a cryptocurrency or any asset to drop after hitting a crucial retracement point.
Therefore, technicals indicate an eventual rebound, as it has formed a handle candlestick. A hammer comprises a small body and a long lower shadow, and is a popular bullish reversal pattern.
Therefore, a rebound will likely see it jump to last year’s high of $400, which is about 42% above the current level. A drop below the support at $240 will invalidate the bullish view.
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AAVE Has a Positive Funding Rate and Falling Exchange Balances
Further, there are signs that investors are highly bullish on AAVE. First, the token has maintained a positive funding rate since June 6.
A positive funding rate signals that long positions are paying a small fee to short positions at regular intervals. It simply means that these investors anticipate that the future price of a token will be higher than the current one.
Furthermore, data shows that the supply on exchanges has been in a free fall, declining from a high of 3.77 million in December to 3.07 million today. This is a sign that these investors are not selling their coins.
AAVE Growing Market Share in DeFi
The other catalyst for the AAVE token is its growing market share in the decentralized finance industry. Data shows that AAVE’s total value locked (TVL) in the DeFi industry jumped to a record high of $27 billion this month. It has jumped from the April low of $16 billion.
Furthermore, AAVE is one of the most profitable players in the cryptocurrency industry, and its numbers are increasing steadily. Its weekly fees rose to $12 million last week, up from $10.7 million the previous week.
AAVE has also survived all the recent black swan events in the crypto industry like the COVID-19 pandemic, the Russia-Ukraine war, and the FTX and Celsius collapses.
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