• Aave (AAVE) has smashed through its all-time high today and looks to lead the next decentralized finance (DeFi) boom.
• Uniswap (UNI) is also making a run at new highs and could be on the verge of a breakout.
• SushiSwap (SUSHI) is up today, but is it lagging behind the rest of the DeFi sector?
AAVE broke through its previous all-time high — set in February 2021 — earlier today after gaining more than 30% in just the last 48 hours alone. If it’s able to maintain this level, AAVE could enter price discovery mode.
AAVE led the last decentralized finance craze in early 2021 and has the potential to be a leader in what could be the next DeFi summer.
If the market continues to play out as it did in the last bull run, then, at some point in the near future, we could see gains shuffle out of Ethereum (ETH, Tech/Adoption Grade “A-”) and into other smaller altcoins. Our guess is that DeFi protocols like AAVE would likely be the first sector to benefit.
Here’s AAVE in U.S. dollar terms via Coinbase Global, Inc. (Nasdaq: COIN):
Uniswap is also up big today — more than 18% over the last 48 hours and more than 10% today.
The Uniswap price is closing in on its all-time high set just last week and is another one of the DeFi applications we think will benefit the most from the next leg of the altcoin season cycle.
Hayden Adams’ open-source decentralized exchange (DEX) makes up roughly one-third of all transactions on the Ethereum network ... and is a leading cause of the extremely high Ethereum gas fees.
Ethereum is still the largest DeFi ecosystem, but with fees as high as they are, we wonder how long that will last. Mainstream users may soon move to Layer 2 solutions which can offer significantly lower fees. Layer 2 solutions are secondary frameworks or protocols built on top of an existing blockchain system to provide updates or solutions.
There’s already a demand from analysts that Uniswap should expand operations to the Polygon (MATIC) network, which boasts processing fees at one-one-thousandth of a cent, as well as make the move to scaling solution Optimism.
For now, Uniswap remains on the Ethereum base layer, though we’ll keep an eye out for any developments. As for the UNI token, the significant level we’re eyeing is $45. If it can push past that level, a parabolic breakout is possible.
Here’s UNI in U.S. dollar terms via Coinbase:
SushiSwap’s price has recovered nicely in the past month. It fell earlier this year after hitting the market on Coinbase, bottoming near $10 in April before climbing back to around $17, where it sits today.
SushiSwap is an interesting DeFi play to look out for during this next market phase. It’s currently lagging behind some of its counterparts and isn’t trading close to its all-time highs, unlike AAVE and UNI.
This tells us SushiSwap still has room to run on the upside. And it could offer a good chance to gain DeFi exposure before the current boom takes full flight.
Here’s SUSHI in U.S. dollar terms via Coinbase:
Notable News, Notes and Tweets
• Dan Held, Director of Business Development at Kraken, points out an interesting stat about American Bitcoin adoption.
• Previous generations bucked the system with rock ’n’ roll; this generation might be doing the same with crypto and meme stocks.
What’s Next
In addition to surpassing its all-time high earlier, AAVE might just crack $600 as well, despite some profit-taking. So, we stand firm in our belief that DeFi is the next sector of digital assets that will see a huge price boom in the short term.
At this stage in the altcoin season cycle, we expect to see money start to shift out of Ethereum and into other altcoins — namely large- and mid-cap altcoins in the DeFi sector — shortly.
AAVE and UNI stand out as potential winners of this next market phase, with SUSHI holding serious potential for big profits as it sits coiled up and ready to break out.
DeFi is not only a great potential long-term play; it just might kick off the next explosive price rally in crypto.
Best,
Alex
