Key Takeaways:
- Aave Protocol shared a proposal to convert 1,600 Ether into wstETH and rETH.
- However, AAVE price dipped after rallying 37% since June 29.
NEW DELHI (CoinChapter.com) — DeFi platform Aave’s treasury has put forward a proposal to convert 1,600 ETH (worth over $3 million at writing) into wstETH and rETH to earn staking rewards.
Wrapped Staked ETH (wstETH) and rocket pool ETH (rETH) are liquid staking derivatives, which allow users to earn rewards for locking crypto assets in a blockchain network while retaining the liquidity of the locked funds.
Aave, with a current TVL of $5.95 billion, might be able to earn 3.8% by staking wstETH and 3.13% with rETH. In comparison, the DeFi platform’s treasury currently earns 1.69% by staking the 1,600 ETH on the Aave V2 platform.
At present, the proposal has 252,152 votes, all in favor. The voting period would end on July 8.
Meanwhile, the namesake token of the protocol, AAVE, has formed a bearish technical pattern called the ‘Descending Triangle.‘
The descending triangle is a bearish continuation setup with a falling resistance line that caps upside attempts and a flat support that prevents declines. The height of the triangle’s thickest section determines the price target in a descending triangle setup.
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Therefore, if the triangle pans out, AAVE faces a drop of 75% to $19. The token last reached the price level in July 2020.
AAVE Price Rally Falters, But Bulls Defend EMA Support
AAVE price dropped over 11% on July 5 before bulls recovered some of the losses. Long upper wicks on recent daily candles suggest the token is facing increasing bearish pressure. However, the bulls continue to defend the 200-day EMA (green wave) support level near $71.
Moreover, failure of the EMA support level could send the token’s price crashing to $63 before recovering.
Additionally, AAVE’s 100-day EMA (blue wave) and 20-day EMA (red wave) seem on course to form a bullish pattern called the ‘golden cross.’
Traders often consider the pattern a signal of bullish market sentiment. Hence, if buyers enter the market, AAVE price might rise to the resistance near $80.
Furthermore, breaking and consolidating above the immediate resistance might help the DeFi token price target resistance near $88.6 before retreating. A rise to the $88.6 resistance level would help Aave recover most of its 2023 losses.
The RSI for the token remained neutral, clocking at 64.44 on the daily charts.
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