Cryptocurrency

AAVE traders caught in dilemma should take a look at these metrics for clarity

The presence of the AAVE protocol and token in the DeFi house has been distinguished since its launch. And, with its third iteration, AAVE has cemented itself as a prime lending protocol.

Regardless, its native token is but to outperform its counterparts. At press time, AAVE was the #50 largest cryptocurrency in the world by market cap.

AAVE goes down simply when it goes up

A rally price 34.45% is sweet sufficient for any asset to revive its buyers’ religion. But when the identical occurred in the case of AAVE, the altcoin triggered buyers to double down on their bullishness ensuing in excessive liquidations and sudden promoting inside 24 hours.

AAVE value motion | Source: TradingView – AMBCrypto

At the time of writing, 350k AAVE price over $23.1 million was cumulatively obtained by cryptocurrency exchanges’ wallets. However, this isn’t what decided AAVE’s worst day in historical past.

It was the desperation of the buyers that led to it.

1655901288 705 AAVE traders caught in dilemma should take a look at

AAVE buyers’ promoting | Source: Santiment – AMBCrypto

The network-wide provide of AAVE reveals that the whole belongings that moved round in the final 24 hours of 21 June had been moved at a loss. the present buying and selling value of $66 was far decrease than the value they had been purchased at.

This resulted in $114 million price of provide sitting at a loss in mixture, the best ever registered determine in the historical past of AAVE.

1655901288 343 AAVE traders caught in dilemma should take a look at

AAVE provide at a loss | Source: Santiment – AMBCrypto

Further backing the buyers’ desperation was the truth that AAVE’s Long Term Holders (LTHs) and loyalists moved their holdings round.

Additionally, buyers who had held on to their AAVE for greater than a yr out of the concern of further losses determined to shift it round. Consequently, consuming greater than 162.45 million days, the second-highest ever. 

1655901288 955 AAVE traders caught in dilemma should take a look at

AAVE LTH promoting | Source: Santiment – AMBCrypto

All in all, these three cases are proof that AAVE holders aren’t right here for the long-term sport. They usually tend to exit their place at the primary signal of profits- simply the best way they did on 21 June.

Time to maneuver on to AAVE V3?

The AAVE token has not affected AAVE V3 for the reason that protocol is doing fairly nicely. The whole variety of transactions pertaining to borrowing, though have been decrease than deposits, has solely been rising.

In the Polygon and Optimism markets, V3 has famous a profitable improve in its demand.

1655901288 118 AAVE traders caught in dilemma should take a look at

AAVE deposits and withdrawal | Source: Dune – AMBCrypto

As lengthy as AAVE v3 continues to point out regular progress, the AAVE protocol and token will handle to outlive even when buyers chorus from backing it.

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