Aave breaks down the falling wedge pattern – Is 335 USD the next target?

After fluctuating around the 300 USD mark at the beginning of the week, the price of Aave seems to have finally broken out of the prolonged consolidation pattern. On Friday, September 12, this DeFi token quickly returned to the 320 USD level, thanks to the strong rise to the sky of the overall market, although it had slid back to 313 USD as of the time of writing.

The impressive price surge of Aave indicates that the altcoin's return to the 320 USD level may not be a random event. The combination of positive technical outlook and strong on-chain signals is painting a promising picture for the upcoming prospects of the AAVE token.

What does positive divergence mean for Aave?

In a Quicktake post on the CryptoQuant platform, CryptoOnchain shared an interesting perspective on the price journey of Aave, from around 130 USD at the end of 2024 to over 340 USD this year. According to this analyst, the Market Cap to Total Value Locked ratio of Aave has simultaneously decreased to its lowest level in two years, right as the token price peaks in 2025.

The MC/TVL ratio is an on-chain metric that compares the market capitalization of a token with the total value locked on its underlying protocol. CryptoOnchain notes that typically, this metric will rise alongside the price, unless the TVL increases at a faster rate than the market capitalization.

The decrease in the MC/TVL ratio to its lowest level in the past two years — right when the price of AAVE increased — demonstrates a positive divergence, which could be driven by a significant influx of capital into Aave contracts. According to CryptoOnchain, this capital flow has raised the TVL without fully reflecting it in market capitalization.

Source: CryptoQuantAnalysts believe that this situation reflects relatively low valuation, provided that the growth in TVL is sustainable and not the result of short-term yield farming activities. Overall, this positive divergence could serve as a bullish catalyst for both AAVE token and the fundamental factors of the protocol.

Is 335 USD the next price level for AAVE?

In a separate analysis on social media X, analyst Ali Martinez set a price target for AAVE at 335 USD. This positive prediction is based on the recent breakout from a descending wedge pattern on the four-hour chart.

The descending wedge pattern, characterized by two converging downward trend lines, is often considered a bullish pattern. After falling into the descending wedge at the end of August, the price of Aave finally broke out of this pattern.

According to Martinez, the price of AAVE could rise to 335 USD in the next rally, representing an increase of over 5% compared to the current price. As of the time of writing, Aave is trading around 318.5 USD, recording an increase of nearly 4% in the past 24 hours.

Emma