AAVE: Strong Metrics, Weak Token Price—What’s Holding It Back?

AAVE’s DeFi metrics are surging, yet its token price remains over 50% below its all-time high (ATH) of $666.86. Arthur, Founder and CIO of DeFiance Capital, highlighted this discrepancy, pointing out that AAVE’s protocol metrics have surpassed previous ATH levels while its token valuation lags. This disconnect raises questions about what’s holding the token back despite its impressive on-chain performance.

Protocol metrics of @aave already exceed ATH by wide margin but the price is still >50% below ATH.

Stablecoin supply also significantly higher compare to 2021 which power DeFi.

Higher pic.twitter.com/EiMZk0Anoj

— Arthur (@Arthur_0x) December 12, 2024

The platform boasts a total value locked (TVL) of $38.578 billion, alongside a market capitalization of $5.299 billion and a current token price of $351.50. Over the past 24 hours, AAVE recorded a trading volume of $1.965 billion, with staked tokens totaling $1.039 billion, representing 20% of its market cap.

Source: X

AAVE’s borrowing volume stands at $15.318 billion, reinforcing its role as a key liquidity provider in decentralized finance (DeFi).

AAVE’s revenue has also been strong. Over the past year, the protocol’s fees totaled $618.97 million, with annual revenue reaching $117.94 million. Despite these figures, AAVE’s operating costs are low at just $6.28 million annually.

Surge in Price Action and Trading Volume

Recently, AAVE’s token price has seen surges. The AAVE/USDT trading pair increased by 30.83% to $359.84, from a low of $125.73. This price increase has raised questions about the causes of the rise, with some analysts speculating about the impact of upcoming protocol upgrades and increased DeFi adoption.

Money Guru, a crypto analyst, said the moving averages (MAs) of AAVE’s price show strong momentum. The short-term MA is $292.32, the medium-term MA is $223.90, and the long-term MA is $170.93.

$AAVE protocol metrics have hit record highs, supported by a surge in stablecoin supply that bolsters DeFi liquidity and stability.

However, the $AAVE token price remains over 50% below its all-time high, highlighting a disconnect between platform performance and market… pic.twitter.com/6dGsOHGq8T

— Money Guru Digital (@Moneygurudigi) December 12, 2024

Moreover, trading volume has surged, with over 786,000 AAVE tokens traded in the past day. This indicates increased market interest and debate on the token’s future price.

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