An Ethereum-based DeFi Token Displays Bullish Divergence: Santiment
The crypto analytics firm Santiment has identified a couple of bullish divergences in the native token of a decentralized finance (DeFi) project based on Ethereum (ETH).
Aave (AAVE), a DeFi lending protocol, is currently trading at $93.89 and has experienced a more than 2.3% increase in the past 24 hours.
Increased AAVE Holdings and RSI Indicator
Santiment has observed that the top 150 non-exchange wallets now hold 9.61 million AAVE, which is the highest it has been in five months.
The analytics firm also notes that AAVE’s Relative Strength Index (RSI) has fallen below 40. Historically, this level has served as a “bounce zone” for the asset.
Understanding the RSI Indicator
The RSI is a widely used momentum indicator that determines if an asset is overbought or oversold. It ranges from 0 to 100, with readings below 30 considered bullish and readings above 70 considered bearish.
Cardano’s Address Drop and Price Movement
In addition to AAVE, Santiment highlights that Cardano (ADA), a competitor to Ethereum, experienced a sudden decrease in small wallets in mid-November. This drop often indicates capitulation and can be a potential turning point for price movement. Since then, ADA has seen a 65% increase.
Closing Thoughts:
The native token of the DeFi project based on Ethereum, Aave (AAVE), is displaying bullish divergence according to Santiment. With an increase in AAVE holdings and the RSI indicator entering the “bounce zone,” the token may be poised for a potential price increase. Additionally, Cardano’s recent address drop could signal a turning point for its price movement. As always, it is important to stay informed and monitor these indicators closely.
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