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Aave surpasses major American banks and continues to lead in the DeFi field, but the AAVE price faces a short-term pullback.
[Coin World] Aave is becoming the focus of the Decentralized Finance (DeFi) market as it continues to set new records and expand its position relative to traditional financial institutions. In contrast to this favourable information, short-term signals suggest that the price of AAVE may face a pullback.
Take the spotlight away from traditional banks
According to data from the platform, Aave has surpassed three other major American banks, becoming one of the top 40 banks in the U.S. by asset size. This is an impressive achievement for a decentralized lending platform launched in 2017. This development not only showcases the strength of DeFi but also reflects the strong shift of capital from TradFi to digital finance.
Currently, Aave's active loan amount exceeds $25 billion, reaching an all-time high. The total outstanding loans have reached $26 billion, which is four times higher than the same period last year, highlighting the growing demand for Decentralized Finance lending services. It is worth noting that Aave's revenue has increased for four consecutive months and currently accounts for 71% of the total revenue of the entire lending market.
In addition to leading the lending sector, Aave has surpassed Circle to become the second-ranked cryptocurrency company globally by Total Value Locked (TVL). Furthermore, a trading platform has announced the relaunch of the Bootstrap Fund to enhance the stablecoin liquidity of Aave, Morpho, Kamino, and Jupiter, which is expected to facilitate capital inflows, improve liquidity, and expand the platform's user base. Support from such large exchanges further solidifies Aave's position in the DeFi ecosystem.
From a technical analysis perspective, some traders believe that the price of AAVE could reach "crazy" levels by the end of the year. However, short-term signals tend to indicate a pullback. According to market analysis, the market structure was broken after forming a horizontal bottom, accompanied by a character change (CHoCH) signal. A slight price rebound is expected before a decline towards the target range of $269-$272. This suggests that investors should remain cautious in the short term, especially those trading with leverage.