The cryptocurrency market is advancing at the beginning of 2023; Bitcoin is trading again above $21,000. This situation also positively influenced the price of AAVE, a governance token for the open-source liquidity protocol, Aave.
AAVE has advanced more than 60% since the beginning of January 2023, and it is also important to note that Aave announced its plans to release GHO, a stablecoin, in the first quarter of 2023.
This is another significant factor that also contributed to AAVE’s growth. With the growing demand for stable assets on the cryptocurrency market, anticipation for the launch of GHO is high.
Despite this, investors should continue to take a defensive investment approach early in 2023 because the global economy faces a recession risk that could dent financial markets again.
Major central banks signalled that they would keep lifting interest rates in 2023 to bring down inflation. Investors continue to worry that aggressive monetary policy could cause a multi-year recession.
The cryptocurrency market is correlated to equities and vulnerable to macro-market shifts. Famous investors Peter Schiff and Jim Cramer have once again called on investors to sell their cryptocurrencies.
Another negative news for this week came from Jamie Dimon, CEO of American multinational financial services company JPMorgan Chase, who said that Bitcoin is worthless. However, he expressed approval for the blockchain and said:
“Blockchain is a technology ledger system that we use to move information. We’ve used it to do overnight repo, intraday repo, and to move money. So that is a ledger technology that we think will be deployable.“
AAVE Price Prediction
AAVE has advanced more than 60% since the beginning of January 2023, and if the bullish trend continues and increases the price above $90, the next target could be resistance at $100.
The price of this cryptocurrency is also correlated with Bitcoin, and if the price of Bitcoin jumps above $22000, we could probably see AAVE at a higher price level than the current price. The current support level is $80; if the price breaks this level, we could see AAVE at $75 or even below.
AAVE has a current market capitalization of US$1.24B, according to data taken from CoinMarketCap.
Conclusion
The cryptocurrency market seems to be advancing at the beginning of 2023. Bitcoin is trading again above $21000, which has also positively influenced the price of Aave. Despite this, investors should continue to take a defensive investment approach early in 2023 because the global economy faces a recession risk that could dent financial markets again.
