AAVE faces immediate resistance at $118

AAVE has soared 11.63% in the past day

The token is currently facing resistance at an important price level

Aave’s total value locked is up 5.73% in the past day

Aave (AAVE/USD) is an open-source, decentralized, peer-to-peer lending platform. The protocol is known for its flash loans, which are blockchain-based uncollateralized loans. The loans must be repaid within a single block time for the transaction not to be reversed. Its native AAVE token is among the highest gainers in the crypto space.

At an 11.63% jump in the past day, AAVE is benefiting from the ongoing market recovery. The recovery is partly due to a report that the inflation rate is softening. Data from the US Bureau of Labor Statistics show that the consumer price index increased 8.5% YoY in July. This compares to 9.1% recorded in June.

The data has played well for the DeFi tokens. There is an increase in interest for riskier assets among investors. Apart from Aave, other major DeFi tokens are leading the recovery. Fantom and Uniswap have jumped 4.7% and 8.73% in the past day. While the asset class is responding in kind to the positive economic data, market-specific factors are also aligning.

During the 2022 Blockchain Futurist Conference, crypto executives cited the robust DeFi growth. Most analysts said that centralized financial institutions were playing a significant role in the expansion. The sentiment can be affirmed with a 5.73% jump in Aave TVL at $7.43 billion. The bull run is vivid in the short-term chart below.

AAVE/USD is bullish but faces immediate resistance at $118

Source: TradingView 

From the daily chart, AAVE moved from $44 on June 19 to the current price of $109. The surge represents a 147% gain in under two months. Further, the token is trading above the 9-day and 21-day moving averages. However, AAVE is approaching a resistance level.

At $118, AAVE could consolidate or make a retracement before any further uptrend. Nonetheless, the RSI is at 63. The reading, which is at the highest in five months, remains below the overbought zone. If AAVE fails to break above the $118 resistance level, it could retrace to $75 or $44 support.

Concluding thoughts

Aave token is leading gains in the crypto space. DeFi tokens are currently among the top gainers. The token could face resistance at $118. $75 and $44 are the key price levels that could present a buy opportunity.