Aave (AAVE) is gaining momentum amid a resurgence in decentralized finance (DeFi) activity, with the token reclaiming the $300 level and showing signs of a potential move toward $400. The price level had previously acted as a correction point in December 2024, making the current trajectory particularly noteworthy. This development aligns with broader market optimism fueled by Federal Reserve Chair Jerome Powell’s comments in late August, which suggested the possibility of rate cuts in the near future [1].

Ethereum (ETH) has also experienced a strong rally, coming within 3.1% of its historical high. As a foundational element of the DeFi ecosystem, Aave is positioned to benefit from stronger ETH prices and reduced borrowing costs, which are funneling more capital into lending and staking activities [1].

Technical indicators further support a bullish outlook. Aave’s weekly chart indicates a recovery from a significant retracement in early 2025, with on-balance volume (OBV) reaching a new high compared to late 2024, signaling increased buying pressure. The MACD is gradually climbing without signs of overextension or bearish divergence, suggesting that the upward momentum could continue [1].

However, the market must also contend with the risk of profit-taking. At the time of writing, 97.4% of AAVE supply was in a profit position, a record high over the past 12 months. This suggests that a correction could emerge if traders decide to lock in gains. Historical data indicates that $300 remains a critical support level, with a significant amount of AAVE acquired near this price over the past two years. Above $390, supply becomes sparse, which could either support or challenge the bulls [1].

Aave’s strategic expansion into the Aptos blockchain reflects its broader vision to diversify DeFi infrastructure across multiple networks. This move aligns with the growing demand for decentralized financial solutions and underscores Aave’s commitment to innovation [2].

While the path to $400 appears viable, investors are urged to remain cautious. Aave’s strong upward trend is accompanied by the risk of a pullback, especially with such a high concentration of profits among token holders. Traders are advised to monitor key resistance levels at $417 and $527, as well as Fibonacci extension levels, for potential take-profit opportunities [1].

Source: [1] DeFi revival fuels AAVE’s rally: Is $400 on the cards? (https://ambcrypto.com/defi-revival-fuels-aaves-rally-is-400-on-the-cards/) [2] Crypto Short News – Latest Real-Time Updates (https://coinpedia.org/crypto-live-news/)