🚀 Crypto AAVE Surpasses $360: Bullish Momentum Driven by Influx of Dormant Tokens

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AAVE, the native token of the decentralized crypto lending platform Aave, surpassed $363 after surging by approximately 30% over the past day.

This is the first time since 2021 that the asset has recorded a crucial milestone in a rally powered by a huge wave of coins moving back into circulation.

Major AAVE Stakeholders Circulate Dormant Coins​

As highlighted by Santiment in its latest analysis, this surge is coupled with a significant drop in the “Mean Dollar Invested Age,” a key indicator suggesting that major stakeholders are moving previously dormant tokens back into circulation. This influx of active coins plays an important role in driving bullish momentum for AAVE.

Additionally, the on-chain crypto analytic platform noted that active traders have experienced massive returns, with 30-day and 365-day gains of over 96% and 290%, respectively.

However, Santiment warns that the current rally’s sustainability depends on whether large holders continue to circulate older tokens. Should whales decide to halt their activity, a retracement could occur. In such a scenario, AAVE’s bullish phase risks cooling.

Adding another layer of insight, Spot On Chain reported that Blockchain Capital, a prominent early investor in AAVE, deposited a significant amount of the token – 16,964 – to FalconX after two years of inactivity. This stash is worth around $5.06 million.

It is important to note that Blockchain Capital acquired a total of 233,256 AAVE between August 2020 and March 2023, at an average price of $82.9. The venture capital firm still holds a substantial amount – 216,292 AAVE, valued at almost $79 million.

This large deposit, coming after a prolonged period of inactivity, could potentially signal whales re-engaging with AAVE, aligning with Santiment’s observation that the movement of older tokens is essential for sustaining the asset’s bullish trend.

Catalysts Behind AAVE’s Growth​

Several key developments are contributing to AAVE’s recent price surge. First, decentralized exchange (DEX) Balancer launched its V3 upgrade which introduces enhanced liquidity optimization, increased trading volume, and advanced tools for developers.

Aave has partnered with Balancer to integrate its permissionless automated market maker technology with the former’s yield market infrastructure, creating 100% boosted pools. This collaboration is expected to bolster AAVE’s liquidity and trading activity, further supporting its price growth.

Additionally, Aave’s upcoming launch on Linea, a zk-rollup network backed by Consensys, is another key factor. With community approval, the platform will leverage Linea’s scalability and reduced transaction fees, allowing it to process more transactions efficiently and at a lower cost, thereby increasing adoption.

Lastly, the recent acquisition of $1 million worth of AAVE by President-elect Donald Trump’s DeFi project, World Liberty Financial, has added to the momentum. The project purchased AAVE tokens at an average price of $297.8, signaling strong institutional confidence in AAVE’s prospects.

The post AAVE Surpasses $360: Bullish Momentum Driven by Influx of Dormant Tokens appeared first on CryptoPotato.