AAVE is showing fresh signs of stability after defending one of its most closely watched long-term support zones, while the lending protocol also delivered strong financial results despite a difficult month for the broader cryptocurrency market.
According to market analyst The Boss, AAVE has remained above the support level for a week now. What needs to be seen next is whether the bounce will turn into a recovery trend.
The analyst pointed out that further buying is required to reverse a downtrend after such a long decline from above $300.
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Buyers Defend Long-Term Demand Zone
The most robust technical level appears to be the zone of support between $40 and $55, which has attracted buyers on the previous market cycle and also proved to be a base for the current decline.
Source: X
A bounce off the support area indicates that buyers have become active again, and AAVE has started its upward journey towards the $96 resistance area.
The rally could continue beyond the $96 resistance zone towards $115.70 in case of a weekly closing above the $96.60 level. Some profit booking may hamper the uptrend, but the overall situation for bulls seems more promising on a weekly basis.
Protocol Delivers Strong June Performance
Although the price action of AAVE was attempting to recover, the protocol remained profitable despite the fact that the Ethereum network fell by over 20% during the month of June.
Source: X
According to an analysis by TokenLogic, Aave had a profit of $11.9 million from protocol revenue in June alone, which is close to double the amount from May.
Interest from borrowings contributed the most to the total income, with $4.5 million. Liquidation fees and Chainlink Smart Value Recapture generated $2.9 million and $2.8 million, respectively. There were some other sources of income, including that from GHO and swap fees.
Source: X
Aave Deposits Reach New High in July
Despite the tough market situation, the platform continued its growth. The deposits of Aave V4 grew from $119 million to $232 million in June, which is a 94% growth rate per month.
By the end of the month, the DAO of the protocol had almost $160 million worth of assets on-chain, which included $87 million of AAVE tokens and $43 million in stablecoins.
Source: X
The process has continued through the month of July and is characterized by a growth of total deposits by users to over $25 billion on Aave markets. Meanwhile, the deposits on Aave V4 increased to an all-time high of over $262 million.
Source: X
Can Buyers Sustain the Rebound?
Going forward, the next action for AAVE will depend on the ability of buyers to transform the current rally into a breakout above resistance at $96.60.
The token has been able to maintain its upside momentum by remaining above its long-term support level; however, sustained buying pressure is necessary to drive it further higher. Higher levels of resistance will gradually become visible should momentum hold.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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