With the major cryptocurrencies regaining lost ground against the bears, the market has returned to the $2 trillion market cap level. This led to huge gains in the altcoin market as the tokens rode the bullish wave. AAVE is one of the largest gainers this week with a whopping 20% uptick.
This is largely due to the return of bullish sentiment in the market and positive on-chain development which drove speculation for the token. With the upcoming release of the consumer price index (CPI) data today, an optimistic market awaits to jump on the bullish train.
AAVE DAO Eyes New Asset To Deploy On-Chain
Yesterday, September 10, Aave Chan Initiative (ACI) released a proposal to the AAVE community to include Coinbase’s cbBTC to Aave v3 on both the Base and the Ethereum Mainnet.
According to the proposal, Coinbase’s entry into the wrapped Bitcoin market brings a “unique value proposition to the Aave ecosystem.”
ACI also points out how users of Aave will benefit if the proposal passes. Another addition to the pool of assets Aave supports is better asset diversification for users, giving them solid and reliable options to put their money.
Overall, the addition of cbBTC on Aave is viewed with much enthusiasm, however, some members of the community are hesitant with the current version of the proposal. Midapple expressed concerns about the proposals, specifically about the timing and implications the proposal has.
cbBTC was announced almost a month ago with no details about the mechanism behind the coin. With Coinbase’s centralized nature, the community will have some difficulty protecting the network against possible problems of early adoption like low liquidity.
In the case of Coinbase, which is a regulated entity in the United States, regulatory scrutiny will also affect cbBTC in the future and, by extension, the Aave network itself.
As of writing, no further revisions have been made to the proposal.
The Aave DAO just deployed a dedicated @ether_fi market on Aave.
Users will now be able borrow stablecoins like $USDC, $pyUSD, and $FRAX against their @ether_fi weETH liquid staking tokens. pic.twitter.com/s3Met9veuU
— Aave Labs (@aave) September 9, 2024
Another development on-chain is the deployment of a dedicated Ether.fi market on Aave, introducing liquid restaking on the platform.
According to the thread, the new addition is a glimpse at Aave v4 which has new features like dedicated liquidity instances and risk isolation.
Possible Correction To Occur Around ~$150
The token’s astonishing drive upward has been due to the market recovery from the early September slump. Currently, AAVE is right between the $147-$157 trading range which might provide the bulls with a strong support level.
However, the token’s bullish momentum is almost spent up, marked by the relative strength index (RSI) indicating that the bulls are somewhat exhausted.
Investors and traders should monitor the token’s movement in the coming days as a correction might push the token below $147 before settling above the latter.
Featured image from StormGain, chart from TradingView