The AAVE lending platform has been getting some positive news lately. According to reports, AAVE has passed a governance proposal that will remove all the bad debts accumulated when Avraham Eisenberg, the orchestra of Mango Markets exploitationtarget liquidity pool Ethereum V2 platform back on November 2022.
However, the platform’s governing token, AAVE, has yet to respond positively or negatively. According to data from CoinGecko, the token registered losses in daily and weekly time frames. But the losses were too small to recoup the token’s gains from the start of the year.
With the launch of AAVE’s V3 on the mainnet, crypto may be in a position to scale new highs if conditions allow.
Image: Coinpedia
Core Proposal & On-Chain Development
Based on proposal, the token has more than 2,677,749 CRV units in debt in the Ethereum V2 CRV reserve. It was worth, at the date of the proposal, over $2.5 million. The proposal will use V2 stablecoin reserves to purchase the required number of CRV units to pay off the debt.
This was clearly received by the community positively, immediately implemented on January 25. This will reverse the damage from exploitation attempts, proving the liquidity of the protocol.
A V3 AAVE deployment on Ethereum is also underway. according to defilama, crypto is in the top 4 among all platforms. AAVE V3, the Ethereum pool expansion, has a total value of $526.52 million locked up.
Image: DefiLlama
At $86.02, What’s Selling for AAVE?
The token is currently consolidating around the $85.8 support range. This could be a sign that the token still has room to regain lost ground from the bear market of 2022. However, this can only be achieved if the token closes with a green candle to continue the AAVE rally as the year begins.
Investors and traders should target the token’s current resistance at $90.15. If the bull can consolidate on the token’s current support, we can see a push up to $94.70.
AAVE total market cap at $1.2 billion on the daily chart | Chart: TradingView.com
Investors should also monitor the token’s correlation with Bitcoin and Ethereum as this will have a major impact on price movements in the short to medium term.
As these major cryptocurrencies retest important resistance, a breakthrough by either or both of these coins will boost AAVE’s momentum to regain lost ground.
With that in mind, investors and traders should be cautious in the short to medium term as the token may still be clawed by bears to return to $78.65.
Featured image by Kanalcoin.com