Aave, one of the leading decentralised finance (DeFi) lending platforms, is currently showing remarkable resilience at the $265 level. Despite broader market uncertainties, Aave has crossed a significant on-chain milestone, becoming the first DeFi protocol to surpass $60 billion in net deposits. While technical indicators remain mixed, the overall fundamentals are pointing toward a potential breakout. 

Net Deposits Surpass $60 Billion, A DeFi First

Aave has set a new benchmark in the decentralised finance space by crossing over $60 billion in net deposits, a key measure representing the difference between the total assets supplied to the protocol and the assets borrowed. A positive net deposit figure signals strong user trust and indicates that more capital is flowing into Aave than being withdrawn.

Founder Stani Kulechov highlighted this achievement on August 6 as a strong sign of growing interest in DeFi lending. This surge in deposits has come despite price weakness in the broader crypto market, suggesting that users are continuing to interact with and rely on the Aave protocol.

Strong On-Chain Metrics Back Aave’s Position

Supporting this trend, data from DeFiLlama shows Aave’s total value locked (TVL) has increased sharply, climbing from $24 billion in early July to nearly $35 billion by August. This 45% jump highlights expanding usage across its ecosystem.

In parallel, protocol revenue has also risen. Network fees generated by Aave grew from $48 million in June to $65 million in July, further reflecting deeper engagement from both lenders and borrowers.

To encourage more development and integrations, Aave launched its V3 developer toolkit on August 6. This new release includes SDKs, APIs, and React hooks aimed at simplifying the creation of lending vaults. These vaults allow for more customisable lending strategies, potentially expanding the use cases for Aave within the DeFi developer community.

Market Activity Cools, But Open Interest Rises

Despite the strong on-chain metrics, market activity appears to be in a cautious phase. According to Coinglass, Aave’s 24-hour spot trading volume dropped by 13% to $297 million, while derivatives volume also fell by 19.3% to $503.6 million.

However, one noteworthy metric stands out: open interest, the total value of outstanding derivatives contracts rose 4.1% to $561.9 million. This increase suggests that although immediate trading activity has slowed, traders may be quietly preparing for a larger move, often through leverage.

This rise in open interest, despite the lower trading volume, may signal that market participants expect a significant price shift soon.

Technical Outlook: Consolidation with Breakout Potential

Aave is currently consolidating near the $265 mark, a key support level. Technically, the indicators show a mixed picture:

• The MACD remains in bearish territory at -9.31, suggesting cautious sentiment.
• The Relative Strength Index (RSI) sits at a neutral 43.3, indicating no strong momentum in either direction.
• The 100- and 200-day simple moving averages (SMAs) remain in buy zones, indicating long-term strength.
• However, short- and mid-term exponential moving averages (EMAs) like the 20-, 30-, and 50-day are flashing sell signals.

Other indicators like the Stochastic RSI and Awesome Oscillator are neutral, but momentum has begun to shift bullish. The lower Bollinger Band, which acts as a dynamic support during consolidation phases, is currently positioned just under the price, reinforcing the $255–$265 support range.

For bulls, a confirmed breakout above $280, especially past the 20-day EMA, could open the path to a retest of the $310–$315 resistance range. On the downside, if the support near $250–$255 fails, the price could revisit the June lows near $230. A drop below the lower Bollinger Band, combined with increased sell volume, would likely accelerate such a move.

All Eyes on $280

While Aave’s short-term price movement has been modest, the protocol’s record-breaking net deposits and growing developer adoption suggest underlying strength. The market may be waiting for clearer signals, but the combination of increased open interest, rising TVL, and strong fundamentals could fuel the next breakout.

If Aave can hold its ground above $265 and break past $280, momentum may quickly return to the bulls. Until then, traders and investors will be watching support levels closely for signs of a potential trend shift.