AAVE DeFi token could rally 25% as whales accumulate

AAVE’s large wallet investors continue scooping up the DeFi token even after gaining 25% in the last seven days.
On-chain data shows buying pressure on AAVE from whales is stronger than selling on decentralized exchanges.
AAVE is poised for 25% gains, and could hit the $170 target.

AAVE, a Decentralized Finance (DeFi) token that ranks in the top 50 cryptocurrencies by market capitalization, has broken out of a nearly two-year long accumulation range after rallying over 25% in the last seven days. Despite the recent price increase, an on-chain analysis from iCryptoAI shows that AAVE holdings from whale wallets have continued to increase in the last 24 hours, suggesting buying pressure persists and making it more likely that the coin extends gains.

AAVE trades at $134.69 at the time of writing.

AAVE whales accumulate the DeFi token

Data from on-chain analysis platform iCryptoAI shows consistent accumulation of the DeFi token by large wallet investors. On August 21, AAVE price climbed to a peak of $143.78 on Binance, the highest since mid-March. Analysts at iCryptoAI mention that the buying pressure is stronger than selling across decentralized exchanges.

Whale wallet holdings of AAVE increased slightly in the last 24 hours.

Data from Santiment shows that the number of large wallet investors holding between 1 million and 10 million AAVE has increased by 40% to 3.98 million between August 1 and August 23. In the same time frame, retail traders with lower AAVE balances reduced their holdings, per the supply distribution chart.

Typically, accumulation by whales even as the asset’s price increases is considered a positive sign. It is typical of large wallet investors to take profits during price rallies and accumulate during the dip. Therefore, accumulation during an ongoing bull market for the asset is a sign of investors’ anticipation of further gains.

AAVE supply distribution

AAVE gears up for 25% gains

AAVE price broke out of its nearly two-year long accumulation range as seen in the AAVE/USDT daily chart.. The DeFi token added over 25% to its value in the last seven days, and if the rally persists it could add another 25% towards $170, a key support level for AAVE throughout 2021 and mid-2022.

The Moving Average Convergence Divergence (MACD), a momentum indicator, shows there is underlying bullish momentum in AAVE with green histogram bars above the neutral line.

AAVE/USDT daily chart

However, The Relative Strength Index (RSI) – another momentum indicator – is generating a sell signal on the daily chart. The RSI stands at 69, exiting overbought territory, a sign to sell longs and open shorts. If there is a correction in AAVE price, the asset could slip into the Fair Value Gap (FVG) extending between $122 and $127.

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Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

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