AAVE rockets toward $262—can this DeFi darling smash resistance and moon?

AAVE’s price action just turned aggressive—up 22% this week as whales accumulate. The $262 level looms as a psychological battleground.

Key factors driving momentum:

- TVL spikes 18% month-over-year as yield farmers chase new incentive programs

- Short interest collapses after last week’s 15% liquidation cascade

- V3 upgrade hype builds with cross-chain expansion rumors

Technical outlook: The daily chart shows a bull flag forming since May’s local top. A clean break above $245 could trigger algorithmic buying—but watch for fakeouts. ’Institutional adoption’ claims still can’t mask that 63% of the supply sits with top 50 wallets (classic decentralization theater).

Bottom line: This isn’t 2021’s meme-fueled frenzy. Either AAVE’s fundamentals justify the pump, or we’re watching the next ’blue chip’ ready to rugpull the overleveraged.

Source: AAVE/USDT on TradingView

The 1-day chart revealed that AAVE possessed a bullish structure. This market structure flip occurred after a move beyond the lower high from March. Situated at $185 and highlighted in white, the breakout past this level occurred earlier this month on high trading volume.

This hike in demand saw the OBV climb higher. At press time, the highs from March were being challenged on the OBV. This meant that the rally from the $160 zone was borne by high demand, and could go further.

The Fibonacci retracement levels plotted based on the rally in November noted that the retracement in 2025 wiped out all the gains made in the latter months of 2024. On the way up, certain levels, such as $230 and $262, WOULD likely be stiff resistance.

At press time, the $230-zone appeared to have been flipped to support. Aave bulls had been battling to surpass this level without success for nearly nine days.

A slight potential for range formation?

Source: Coinglass

The 3-month liquidation heatmap showed that AAVE was closing in on the liquidity pocket at $246.

The proximity of the market price to this liquidation region meant that a MOVE north was likely in the coming days. Whether AAVE can advance beyond $250-$252 would depend on the strength of buying pressure.

Source: Coinglass

The 2-week liquidation heatmap highlighted the potential for a range formation. The magnetic zone at $245-$248 beckoned AAVE higher. However, this level marked the local high of the past four days.

It may be possible that AAVE would face rejection around the $250-level and retrace towards $210, but this scenario appeared unlikely. At the time of writing, the market sentiment was bullish and Bitcoin [BTC] was being pushed higher. This could spur the altcoin upwards too, and beyond the $250 resistance zone.

Hence, the $262 and $284 levels, along with $250, would be the key resistance levels to watch out for. Traders can keep an eye on the OBV to show sustained buying pressure. Otherwise, it would be an early warning sign.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion