Venture capitalist Arthur Cheong is of the opinion that a particular decentralized finance (DeFi) altcoin might be on the verge of a significant breakout.
The CEO of DeFiance Capital informs his 176,400 followers on the platform X that multiple indicators are suggesting a bullish trend for the lending service Aave (AAVE).
He indicates that Aave’s open interest (OI), measuring the total volume of outstanding derivatives contracts related to that asset, may have reached its lowest point following a considerable downturn last month.
“AAVE price has been holding up remarkably well despite the recent flush of leverage on the perps:”
1. Open Interest has hit a 30-day low, decreasing by 50% since September 11th.
2. Funding rate is negative.
This sets it up nicely for the next phase of the rally.”
A negative funding rate indicates that there are more short positions than long positions for AAVE, which some traders interpret as a positive sign.
Additionally, he proposes that Former President Donald Trump utilizing Aave for the introduction of World Liberty Financial, his latest DeFi crypto initiative, could act as a bullish catalyst.
“If you had told me in 2020 that a former and potentially future President of the USA would support the launch of a separate instance on Aave, even the most ardent DeFi supporters wouldn’t have believed it. Yet, here we are. ‘We tend to overestimate the impact of technology in the short term and underestimate its effects in the long run.’”
Last month, he mentioned that Aave seemed to be breaking out of a multi-year consolidation phase on the weekly chart.
“AAVE is currently trading at its highest level since May 2022 and appears to be breaking free from a two-year consolidation pattern. Expect an ATH (all-time high) reclaim to strengthen the DeFi Renaissance.”
Aave is currently valued at $148.88, reflecting a 7.4% increase in the past 24 hours.
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Disclaimer: The opinions expressed herein are not to be construed as investment advice. Investors are encouraged to conduct their own due diligence before making any high-risk investments in Bitcoin, cryptocurrency, or digital assets. Please be mindful that your transactions and trades are undertaken at your own risk, and any losses that may arise are solely your responsibility. The Daily Hodl does not endorse the buying or selling of any cryptocurrencies or digital assets, nor does it serve as an investment advisor. It’s important to note that The Daily Hodl engages in affiliate marketing.
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