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Aave is partnering with Balancer while Wale is submitting $ 24 million worth of AAVE to exchanges

  • The utility of the Aave protocol will expand after a new partnership that opens up new possibilities for creators.
  • Despite the significance of the news, the AAVE price is on eggshells as whales appear to be preparing to sell a significant number of tokens.
  • Cutting through a critical support barrier could bring this cryptocurrency down 35%.

Aave has entered into a new partnership aimed at improving capital efficiency on its loan history. Regardless, the AAVE price appears to represent a downturn as selling pressure rises behind it.

Joining forces to improve the lending protocol

Aave announced a new partnership with Balancer to help build the first Balancer V2 Asset Manager. The idea behind this is to create a tool that allows unused tokens to be used in liquidity pools.

Mostly, tokens that are deposited with Automated Market Makers (AMM) such as balancers, compounds and sushi generate income. Still, the tokens are essentially inert, except when they provide swap liquidity.

The new asset manager will use unused tokens and invest in Aave’s diverse lending platform to solve this problem. The vaults contain a buffer amount to facilitate all swap trades on Balancer. When this amount reaches a critical level, the asset manager takes effect.

By replenishing the monetary amount of this token by redeeming part of the invested tokens at Aave and sending them back to the balancer vault to prevent swaps from failing. The asset manager also increases the invested amount of the token, which is increasingly common in the pool, by sending a little more of it to Aave in order to maximize the return.

Balancer V2 is a new way to create and discover synergies between both protocols by increasing capital efficiency and providing liquidity providers with additional rewards. Essentially, it opens up new opportunities for Aave stakers with the AAVE / ETH Safety Incentive Pool.

The AAVE price is on eggshells

Aave price appears to be free of buyers, which has resulted in a 40% drop in the past two weeks. The significant drop in its market value resulted in the formation of a series of lower highs and lower lows, creating a descending parallel channel along the way.

A break from this technical pattern could go either way, but in Aave’s case, price appears poised for a downturn as the channel’s centerline rejected it.

This bearish scenario is supported by the death cross between the moving average of 50 and 100 six hours (MA). Continued downward pressure could result in further losses. Regardless, only a 6 hour candlestick just below the USD 290 support level confirms a bearish breakout.

If so, the AAVE price could fall between 30% and 35% to the next support barrier at $ 195.

AAVE / USDT 6 hour chart

If you look at the number of tokens that have recently flooded the exchange, the bearish thesis holds true. Two AAVE transactions valued at $ 848,000 and $ 550,000 were posted to known stock exchanges in the past 24 hours.

In addition, around 68,000 AAVE worth USD 24 million were deposited on exchanges. This development is a bearish sign and shows that investors are ready to post profits at the current price level.

AAVE Exchange Inflow

AAVE Exchange Inflow

While the bearish fall seems plausible, investors should note that a sudden spike in buying pressure leading to a close above the station’s upper trendline at $ 463 is also on the horizon.

If so, the Aave price could bounce at $ 563 all the way to the first supply barrier. Hitting this level could result in further gains as the chance of a 20% increase increases to $ 700.

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