- The technical picture suggested at AAVE rally due to the state of RSI
- Holders in the last six months seemed to have gained balance but AAVE could trend downward
Like its peers, the non-custodial liquidity protocol, AAVE, ended 2022 on a slow note. According to CoinMarketCap, the value of AAVE on December 31 was around $52.
This contrasted with the increase it had a month ago. On the technical picture, the AAVE Relative Strength Index (RSI) languished in the drop zone between the last day of last year and January 1, 2023.
How many AAVE can you get for $1?
At press time, the RSI turned away from the dip and rose to 40.14. This was a similar trend that continued when the price reached $65 on December 5. This, then, begs the question: will AAVE be able to recreate such a performance in the first days of the new year?
January leadership opposes motion
The Directional Movement Index (DMI) was on the opposite side of a potential rally. This was because the DMI indications seemed to be in line with the negative (red) DMI trend.
At the time of writing, the -DMI was high at 24.90. On the other hand, the +DMI (green) fell short at 15.90. The implication of this disparity was that AAVE might have a hard time generating an advantage any time soon.
In addition, the average directional index (ADX) reinforced the strength of the DMI. This was because the ADX (yellow) was 27.07. This later position implied that the value of AAVE would most likely follow a bearish direction.
Because of its reputation in the Decentralized Finance (DeFi) ecosystem, AAVE did not cave to pressure. According to DeFi Flamethe AAVE Total Value Blocked (TVL) lost 1.96% of its value in the last 30 days.
This left the TVL of the protocol at $3.72 billion. The decline implied that not a large number of investors were willing to lock up their assets in AAVE-powered DeFi contracts.
Read the AAVE Price Prediction 2023-24
Regarding the influence of prices, the state showed that there was not much room for growth. Therefore, investors could expect a smaller price increase in the short term.
What is left for AAVE investors?
Santiment On-Chain Data revealed that AAVE had been able to produce more earnings than headlines than around July 2022. This was due to what was indicated by the Market Value to Realized Value (MVRV) ratio which was -40.14%.
This indicated that AAVE was not necessarily undervalued and that there might not be a need for a price correction any time soon.
As of this writing, AAVE changed hands at $52.93. However, the metrics and technical projection showed more downside than a resurgence.