AAVE price likely on the brink of bullish breakout according to on-chain metrics

AAVE, an Ethereum-based protocol token, is likely heading towards a bullish breakout according to on-chain metrics from Santiment. The largest 150 wallets in AAVE’s network now hold 9.61 million tokens.

AAVE price is $89.91, down nearly 3% in the past 24 hours.

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AAVE on-chain metrics support bullish thesis

According to data from crypto intelligence tracker Santiment, the total volume of AAVE tokens held by the largest 150 wallets has climbed to 9.61 million, the highest level since July.

Accumulation of AAVE by the largest wallet holders is typically followed by a local top in the asset’s price, as seen in previous instances between June and December 2023. The asset’s RSI on the 12-hour chart dropped to 40, this is the level where AAVE prices bounce historically. Analysts at Santiment therefore predicted a bullish breakout in AAVE. 

AAVE held by large wallet investors, RSI. Source: Santiment 

Key on-chain metrics, such as supply of AAVE on crypto exchanges, exchange netflow and Market Value to Realized Value (MVRV) on the 7 and 30-day timeframe, support AAVE price gains.

The supply of AAVE on exchanges has seen no significant change since November 10, as seen in the chart below. However, in the same timeframe there were net outflows of AAVE across crypto exchanges, with large spikes observed on November 19, 29 and December 8. This supports a bullish thesis for AAVE, as there is no significant increase in selling pressure on the asset. 

AAVE supply on exchanges and exchange flow. Source: Santiment 

The asset’s MVRV, a metric that denotes the average profit/loss of all coins within circulation in the past 7 and 30 days, shows that AAVE token holders are sitting on unrealized losses. Since investors do not like to realize a loss, selling pressure on the asset is likely to remain the same or decrease. This supports AAVE price gains. 

Historically, everytime MVRV declined to a similar level (-4.99% on the 7-day timeframe and -5.64% on the 30-day timeframe) there was a bounce in AAVE price, within the following ten days, as shown in the chart below. If history repeats, AAVE price is likely to experience a bullish breakout within the next ten days. 

MVRV ratio (7 and 30-day). Source: Santiment

At the time of writing, AAVE price is $89.91 on Binance, the DeFi token yielded nearly 9% weekly losses for holders.