What Drove Aave (AAVE) Price Up by Over 20%?

• AAVE’s price surged approximately 21%, climbing from $85 to $103.
• The surge is driven by a proposed fee mechanism and token buy-back program, designed to boost the protocol’s revenue.

Amidst the market upturn, the leading altcoin Aave (AAVE), has emerged as a leading performer, climbing over 21% in the last 24 hours and topping the gainers’ list. According to CoinMarketCap, the token’s price surged over $103 from its low of $85. The price of AAVE soared due to a significant governance proposal that suggests introducing a fee mechanism and a token buy-back program.

Additionally, AAVE’s daily trading volume jumps by 140% to $229 million, reflecting heightened market activity. This uptick, alongside rising prices, hints at potential further increases. The core of this excitement stems from a fee switch proposal, introduced by Mark Zeller of the Aave-Chan Initiative. The proposal aims to revamp the protocol’s revenue model by collecting transaction fees and using them to repurchase AAVE tokens from the market.

AAVE Technical Analysis

At the time of writing, AAVE is trading at $99 with a market cap of $1.48 billion. Since March, the token has maintained stability within a tight range of $80 to $100. Currently, the AAVE price is trading above the 50-day and 200-day EMAs, indicating a clear trend direction.

Also, the Relative Strength Index (RSI) stands at 59, indicating growing bullish momentum without reaching overbought levels. TradingView analysis suggests that breaking above the $110 range could see AAVE hitting the next resistance at $130, where the significant bulls get activated and send the price higher to the $150 zone. 

Conversely, if AAVE fails to push the price above $100, we will see an immediate drop below $90. Trading below this level could push the token down to the major support levels of $80 and $75, an area also marked by substantial buy activity.

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