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The cryptocurrency market has been fairly positive over the past week, with the decentralized finance (DeFi) sector and tokens particularly impressive over the last seven-day span. Aave price, for instance, seems to have taken off after making a somewhat tame performance in the remarkably bullish month of “Moonvember.”
According to data from CoinGecko, the price of AAVE has increased by more than 26% over the past week. However, the latest on-chain data suggests that the DeFi token may face some hurdles in its bullish trajectory and suffer a slight setback in the short term. Is AAVE Price Going To Witness A Correction?
In a recent post on the X platform, prominent crypto analyst Ali Martinez revealed that the investor sentiment around the Aave token has become increasingly positive following its latest price upswing. This on-chain observation is based on the Social Volume and Weighted Sentiment metrics. Related Reading Bitcoin Daily Bollinger Bands Expand, Why BTC Price Could Rise To $120,000 As Early As Next Week 20 hours ago
The Social Volume metric measures the total number of mentions of a particular crypto asset on various social media platforms in the last 24 hours. In essence, it tracks the degree of discussion surrounding a cryptocurrency on social media.
Meanwhile, weighted sentiment is a product of sentiment score and social volume. Typically, there is a significant shift in this metric when the social volume is high and there is a specific average sentiment (either positive or negative). Source: Ali_charts/X
Based on data from Santiment, the social volume and positive sentiment around the AAVE price action have grown significantly over the past few days. As shown in the chart below, this soaring positive sentiment correlates with the Aave price surge over the past week.
According to Martinez, a brief price correction might be on the cards for Aave, especially with the crypto crowd seemingly hyped about the DeFi token’s price performance. This is based on the notion — backed by historical data — that crypto prices often in the opposite direction of the crowd.
Recent price action data shows that the Aave price might be falling into something of a consolidation range, having failed to hold above the $380 mark on Friday. As of this writing, the Aave token is valued at $365, reflecting a mere 0.4% increase in the past 24 hours. DeFi Coins Back At It?
Most of the attention has gone to the meme coins — and deservedly so — in this bull cycle. However, it appears that prominent DeFi coins are beginning to pull their weight and stake a claim for the spotlight. Related Reading AAVE Price Soars 26% In A Single Week — Will Rising FOMO Lead To A Bust? 11 hours ago
The past week saw many large-cap DeFi tokens, besides AAVE, grow in market value. According to data from IntoTheBlock, the market capitalization of the DeFi token sector nearly doubled to $20 billion in the past week. The price of AAVE on the daily timeframe | Source: AAVEUSDT chart on TradingView Featured image from Unsplash, chart from TradingView