Three reasons why AAVE could rally in upcoming days

Aave (AAVE) price hovers around $340 on Tuesday after rallying 9% the previous day. On Monday, the Ethereum Foundation allocated 50,000 ETH worth $165 million starting first with Aave, marking an endorsement of the protocol. Moreover, Aave’s recently launched v3.2’s Liquid eModes live on Arbitrum and Base, and its Total Value Locked (TVL) in terms of ETH hit a new all-time high, all hinting at a rally in the upcoming days.

Aave receives funds worth $165 million from the Ethereum Foundation

Aave announced that the Ethereum Foundation allocated 50,000 ETH worth $165 million from its treasury to begin participating in the DeFi ecosystem — starting with a test transaction on the Aave lending protocol on Monday, marking an endorsement of the protocol. The foundation has set up a new 3-of-5 multisig wallet and will use it to participate in the Decentralized Finance (DeFi) ecosystem.

This investment could enhance Aave’s liquidity and further integrate it into the Ethereum ecosystem, signaling confidence in its long-term viability.

At the same time, Aave recently launched v3.2’s Liquid eModes live on Arbitrum and Base. This platform introduces new DeFi primitives and allows users to leverage new collateral types like wstETH and open up unique DeFi use cases with reduced gas costs. This innovation could be seen as a game-changer, potentially attracting more users and increasing the protocol’s total value locked (TVL).

Moreover, crypto intelligence tracker DefiLlama posted on X on Tuesday that Aave’s TVL, in terms of ETH, has reached a new all-time high (ATH) of 6.53 million on Monday.

This increase in TVL indicates growing activity and interest within the Aave ecosystem. It suggests that more users deposit or utilize assets within AAVE-based protocols, adding credence to the bullish outlook.