AAVE 2x Network Growth Review: What Impact Will It Have on Prices?

• The number of AAVE active addresses has doubled in the last three months.
• AAVE’s price action was bullish, but indicators pointed to a possible trend reversal.

Aave [AAVE] has shown promising performance in terms of network activity over the past few weeks. This indicates a rise in adoption and usage. Apart from that, the price of the token also witnessed a similar rise. Let's see what's going on.

Aave's increasing network activity

IntoTheBlock recently published a tweet Highlighting a notable development related to AAVE. According to the tweet, on-chain activity on the blockchain has increased significantly this month, with the number of active addresses doubling compared to three months ago.

AMBCrypto then took a closer look at the blockchain's network activity. Our analysis revealed that the blockchain's daily active addresses also increased last week.

More specifically, the number has increased by more than 140% in the last seven days. Thanks to this, AAVE's daily transactions also followed a similar upward trend during the same period.

Source: IntoTheBlock

However, when AMBCrypto reviewed Token Terminal’s data, it turned out that the blockchain was not performing well in terms of the value captured.

Surprisingly, the blockchain's fees have decreased over the past 30 days despite the increased network activity. This also led to a slight decrease in revenue.

Source: Token Terminal

AAVE bulls have arrived

While all this was happening, AAVE bulls took control of the market by pushing the price of the token higher.

Accordingly CoinMarketCapThe price of the token has increased by more than 4% in the last 24 hours. At the time of writing, the token was trading at $133.01 and had a market capitalization of over $1.98 billion.

Our analysis of Santiment data revealed that the token’s volume increased along with its price, which served as the basis for the bull rally.

AAVE's MVRV ratio has also increased, indicating further price growth. However, selling pressure on the token has increased sharply over the past week as its supply on exchanges increased. Generally, an increase in selling pressure leads to price corrections.

Source: Santiment

We then checked the daily chart of the token to see if the uptrend would continue. The MACD technical indicator showed a bullish crossover.

However, the Relative Strength Index (RSI) has entered the overbought zone, which could increase the selling pressure. Moreover, the Chaikin Money Flow (CMF) also recorded a downtrend, suggesting that AAVE’s bull rally could end soon.

Source: TradingView

Realistic or not, here is AAVE's market cap in BTC terms

AMBCrypto’s analysis of Hyblock Capital data revealed that if the bull rally comes to an end, investors could see AAVE crash to $101 in the coming weeks.

However, if the bulls manage to maintain their lead, the token could soon reach $140.

Source: Hyblock Capital