Aug 28, 2020 12:45 UTC
Aug 28, 2020 at 12:45 UTC
DeFi Darling Aave (LEND) Possibly will Face Correction as Value Ranges Overbought Levels
The Ethereum-based LEND, the native token for the Aave protocol, has seen a spectacular recital over the previous few months as DeFi has ascended to eminence. The asset has expanded more than 5,000% from the lows of 2019. Its present-day trades for $0.76, up about 200% in the past month alone. LEND’s rally has been overwhelming, with the asset managing to ascent exponentially after the March capitulation. Conferring to a new analysis, though, LEND may be reaching unsustainable heights.
Ethereum Defi’s LEND May perhaps Correct as Worth Is Ostensibly Overbought
LEND has slithered 7% in the past 24 hours after a gathering on news of a favorable regulatory event for the Aave protocol. The asset may be dignified to the contrary, even supplementary to the downside as it superficially relics overbought on a macro time frame. Brave New Coin analyst Josh Olszewicz shared the chart below on August 27th. It displays that LEND is above the two times numerous of the one-year moving average. Even though this is the first time LEND has done this as per the chart, this signal suggests that the Ethereum coin is overvalued on a macro basis.
Fundamentals Remain Positive
While LEND may be slipping in the near term, the protocol’s fundamentals remain skewed positive. DTC Capital’s Spencer Noon remarked on the matter:
“One of the best signals of PMF in #DeFi is if a project can succeed w/o extra incentives (liquidity mining). @AaveAave doesn’t have LM, yet it’s still one of the biggest beneficiaries of new yield farming activity. At $1.26B TVL & only $759M mcap, the fundamentals are so strong.”
“Noon is discussing how Aave and LEND have been able to grow organically, without incentives like the liquidity mining craze that has taken Ethereum by storm over recent weeks. The fact that it has accrued so much value and adoption without liquidity mining, Noon explained, goes to show how the protocol’s fundamentals are “so strong.”
Kyle Samani of Multicoin Capital made a similar comment in response to Noon’s strong assertion:
“If I had to hold a single Ethereum based DeFi asset for 2 years, it would be $AAVE. By far, the best combination of product/market fit, token distribution, community, the pace of innovation, and reasonable valuation with upside to go.”
If I had to clutch a single Ethereum created DeFi asset for 2 years, it would be $AAVE