Aave price hits 3-week high as ‘Aave Pro’ debuts for institutional lending

Cryptocurrency

Aave hovered near its three-week high on Tuesday, helped by the prospects of its foray into the mainstream through the launch of an institutional lending platform.

Fundamentals

Dubbed as Aave Pro, the platform expects to become a “permissioned liquidity protocol” by offering institutions, corporates, and fintech clients access to decentralized finance (DeFi). That said, it would follow strict regulations while onboarding participants, ensuring that their Ethereum addresses are safe-listed following a thorough know-your-customer process.

“We will have different kinds of permissioned markets so that DeFi will be more layered and tailored to specific needs,” Stani Kulechov, the founder of Aave, said during the online discussion event “Next Steps for Institutional DeFi.”

“The ability to whitelisting and blacklisting addresses would make it easier to scale institutions because it lowers the risk.”

Aave Pro will go live in July with liquidity pools of Bitcoin (BTC), Ether (ETH), USDC, and its own token AAVE.

Bulls responded positively to Aave’s institutional adoption. As soon as the rumor went live on July 4, the AAVE/USD exchange started trending upwards, insomuch that it crossed $344 for the first time since June 14. At its second-quarter low, the pair was changing hands for approximately $165—that marks a 108% jump.

The massive upside move also took cues from a market-wide retracement trend. Bitcoin, the world’s leading cryptocurrency by market cap, climbed approximately 25% after bottoming out at $28,600 on June 22. The same date saw AAVE/USD falling to $165, which later led to a 108% bullish correction.

Aave and Bitcoin prices almost moved in sync after they bottomed out on June 22. Source: TradingView.com

Bitcoin trends typically prompt alternative cryptocurrencies, including AAVE, to move in the same direction. Nevertheless, AAVE’s bias in the previous five days was consistently skewed to the upside while Bitcoin struggled to maintain support above $35,000. That could have been due to Aave having better interim fundamentals than its top digital asset rival.

Scott Melker, the author of the crypto-focused Wolf Den newsletter, noted Aave attracting massive capital inflows from the Bitcoin market via liquid instrument AAVE/BTC. As a result, the pair grew 74.75% to reach 9,800 sats this Tuesday after finding support at 5,608 sats on June 27.

AAVE/BTC could hit 10,593 sats in the coming sessions. Source: Scott Melker, TradingView.com

Melker’s setup envisioned AAVE/BTC above 10,000 sats.

Technicals

Technically, AAVE/USD appeared in a flying zone after breaking out of a bullish pattern.

The pair earlier fluctuated between two converging trendlines that together formed a falling wedge structure. Falling Wedges begin wide at top but contract as the price moves lower. Their bullish confirmation come only after the price breaks above the resistance trendline in a convincing fashion, with higher volumes.

In doing so, Falling Wedges’ price breakouts set profit-target above by as much as the maximum height between their upper and lower trendlines.

AAVE/USD falling wedge setup. Source: TradingView.com

Aave’s recent price action fits the falling wedge description so far. The cryptocurrency is now in a breakout stage while eyeing $542 as its profit target.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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