The price of Aave (AAVE), the governance token of the Aave lending protocol, has surged by 15% in the past 24 hours, reached $103 as per Coinpedia. This recent jump is linked to a governance proposal that could introduce a fee switch and a token buy-back program. These developments raise questions about whether Aave’s price could climb to $200 soon.
AAVE’s Fee Switch Proposal To Boost Price
The recent surge in Aave’s price is primarily due to excitement over the AAVE fee switch proposal. Mark Zeller, the founder of the Aave-Chan Initiative, explains that the proposal suggests a significant change to the Aave protocol’s revenue model. This would introduce a mechanism to collect transaction fees, using the funds to repurchase AAVE tokens from the open market.
If implemented, this mechanism could generate around $60 million in annual revenue for AAVE holders. Aave, a leading DeFi lending protocol, currently has over $12 billion in total value locked (TVL).
According to Coinalyze, market activity has increased following the announcement of potential protocol changes, with predictions of further rises to 0.0113 in the next 24 hours. Although AAVE’s price is currently at $100, technical analysis suggests potential gains to $110 in the short term and $130 in the mid-term.
AAVE Aiming for $200
AAVE has seen a 35% increase in value over the past year, maintaining a strong upward trend. The token is trading above its 200-day simple moving average, indicating favorable growth potential. With 18 of the last 30 days showing positive momentum, the market sentiment remains strong.
Aave benefits from high liquidity and a substantial market cap, enhancing its trading stability and appeal. Despite being down 85% from its all-time high of $661, AAVE has outperformed 61% of the top 100 cryptocurrencies over the past year, showing stronger performance than Bitcoin and Ethereum.
With these factors in mind, along with the bullish sentiment from the AAVE fee switch proposal and a low yearly inflation rate of 2.29%, the conditions seem ripe for AAVE to potentially reach $200.
Slight Bearish Risk
On the flip side, if the market trend shifts to bearish and the AAVE price drops to $80, the next major support level is at $67, where 16,380 addresses purchased $1.19 million AAVE tokens, which are in profit.
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