AAVE Pumps 15%

AAVE surged 15% following a bullish $1M weekly buyback proposal by the Aave Chan Initiative (ACI) aimed at improving AAVE tokenomics. The proposal states:

> “The ACI considers this proposal can mandate the AFC to start an AAVE buyback and distribute program immediately at the pace of $1M/week for the first 6 months of the mandate.”

This buyback could lead to increased demand and decreased supply, potentially raising the token’s value long-term.

AAVE’s Performance

At the time of writing, AAVE closed the trading session with a 14% gain in 24 hours, extending to 16% after a nearly 2% rise early on March 5. From a peak of $399 last December, the coin fell over 50% to a low of $167, influenced by market uncertainties and Trump’s tariff wars.

While the recent positive news returns AAVE to its downtrend channel, the overall market remains bearish. For a more bullish shift, AAVE needs to reclaim $227 and the $250 mid-range moving averages as support. However, daily RSI indicators show weak demand, which could limit the rally.

Marc Zeller from ACI regards this tokenomics update as crucial for the protocol’s future. DeFi analyst Ignas labeled it a significant move, emphasizing Aave’s capacity for a sustained buyback due to a booming treasury with cash reserves increasing by 115% to $115M.

AAVE Accumulation Increase

After a drop last December, AAVE reserves on exchanges decreased from 2.8M to 2.38M, marking a withdrawal of 480K AAVE tokens (over $96M) and a 16% increase in holders. This trend may indicate a positive long-term outlook for the DeFi token, contingent upon improving market sentiment.