AAVE, one of the biggest decentralized finance (DeFi) protocols, has seen a significant pump — up almost 16% in the last week alone. Here’s why that upward momentum continues to be propelled by some significant headwinds. Strong whale accumulation, bullish technical formation, and broader crypto market rally fueled by Bitcoin are all reasons for this increase. While AAVE faces strong resistance, investors are eagerly watching the move, as a breakout might soon be on the cards.

Bullish Technical Indicators

A few key technical indicators point to a possibility of more upward movement for AAVE’s price. The Relative Strength Index (RSI) just busted out of a 20-year downtrend! It is currently showing very strong bullish divergence, which is a reliable indicator that upward momentum is beginning. This negative divergence indicates that the price is making lower lows. On the other hand, the RSI is making higher lows, showing that the bear pressure is fading and a potential reversal could be coming soon.

Moving Average Convergence Divergence (MACD), another charting indicator, is flashing bullish signals. In fact, it is now testing the zero line from below. If it breaks out above this blue line, it may indicate the start of a new upward trend. Should AAVE rise past the zero line, it’ll validate the presence of sturdy bullish momentum. This collapse is an indication that AAVE is entering a new phase of upward price action.

AAVE’s price action is presently testing important resistance levels. A weekly close above $155 would be needed to confirm a breakout and likely see the stronger upside momentum shift into gear. If this short-term high breaks out strongly, I believe the upside momentum could increase dramatically. Continued acceleration of this pace can make for even larger wins ahead.

Whale Activity and Market Dynamics

This recent surge in whale activity has only added fuel to AAVE’s bullish price momentum. Whale-linked wallets deposited 15,953 ETH into Aave and then borrowed $15.4 million USDT. Then, à la Curve, they deposited the ETH into Aave. Next, the wallets took out 15.4 million USDT in loans and deposited those back into OKX.

This pattern of strategic borrowing and depositing indicates big dollar players are betting on an increase in AAVE profitability. Their actions are evidence of a belief in the protocol’s underlying value and future growth prospects. AAVE's recent surge is largely driven by Bitcoin's recent rally. The price of AAVE has been rising in concert with the wider cryptocurrency market. This increase further demonstrates a deep correlation to general market sentiment and trend.

Historical Patterns and Future Potential

To those willing to see the signs, AAVE is building out a potential bullish structure that would strongly mirror a prior accumulation–to–breakout pattern seen from 2022–2024. During that time, AAVE traded sideways between $50 and $114 before exploding towards the upside to a peak of $460. This historical trend looks very good indeed, for an exciting reason. If AAVE can manage to break above its immediate resistance areas, it may be on track for another impressive price rally.