AAltcoin's 23% surge poses a challenge for AERO, as we delve into the specifics!
In a significant development, Aerodrome Finance (AERO) has seen a 23% surge in the past 24 hours, reaching a new milestone as it reclaimed its $1 billion capitalisation. This impressive growth can be attributed to AERO's integration with Coinbase's Base network, which initially pushed the token up by about 15%.
The integration, combined with large holders accumulating AERO tokens while exchange reserves declined, sparked buying interest despite a decline in overall crypto market conditions. The positive development was further supported by whales and base migration factors, although leverage usage among derivatives traders has increased, making the rally riskier.
However, the uptrend faces sustainability challenges. Despite the price gains, trading volume has fallen significantly (down 23%) and futures open interest dropped by 16%, suggesting weaker market participation and less trader conviction behind the rally. This negative divergence—price rising while volume declines—typically signals that the rally may be short-lived and vulnerable to a sharp reversal if selling pressure increases.
Furthermore, high leverage among long positions and the presence of bearish order blocks around $1.50 to $1.60 create technical resistance and risk of a pullback to around $1.00 should whales take profits. The most significant level below the price is at $1.25, with more than $250K in liquidity, which could potentially act as a support if the price dips.
Looking ahead, the price of AERO is aiming for $2, but a bearish orderblock at the $1.50 to $1.60 zone needs to be cleared for this ambitious target to be realised. A correction to $1 can be anticipated due to potential profit-taking by whales, but the long-term outlook remains positive with more than 100 projects considering launching on AERO's DEX.
The AMM of AERO will serve as the central liquidity hub on the Base chain, contributing to the growth and stability of the AERO ecosystem. As AERO's price continues to test the $1-level on the weekly charts, investors will be closely watching market participation and the potential for renewed broad participation to sustain the uptrend.
- The surge in AERO's price can be attributed to its integration with Coinbase's Base network, prompting large holders to accumulate more AERO tokens, which led to increased buying interest.
- Despite the promising growth of AERO, the trading volume has dropped significantly and the futures open interest declined, indicating weaker market participation and less confidence in the rally.
- The uptrend faces sustainability challenges as technical resistance is created by high leverage among long positions and the presence of bearish order blocks around $1.50 to $1.60, potentially leading to a pullback.
- The long-term outlook for AERO remains positive, with more than 100 projects considering launching on its DEX, and the AMM of AERO serving as the central liquidity hub on the Base chain, contributing to the growth and stability of the AERO ecosystem.
