- AAVE surged 17%, breaking key resistance and reaching above $175.
- Rising Treasury yields above 5% increase competition for DeFi capital.
- Bulls must hold $155 support to sustain momentum toward $180.
AAVE grabbed traders’ attention with a powerful rally that pushed the token above $175. The move came at a surprising time. US Treasury yields have climbed above 5%, creating intense competition for capital across financial markets. Despite those headwinds, buyers continued accumulating AAVE and drove prices higher. The recent breakout has strengthened bullish sentiment, but a key question remains. Can bulls defend former resistance near $155 and keep the rally alive?
AAVE Smashes Through Resistance as Momentum Accelerates
AAVE entered September with strong momentum and showed few signs of slowing down. The token gained more than 17% on September 29, climbing from roughly $149 to above $175. The rally did not appear out of nowhere. Buyers have steadily pushed prices higher since mid-August. During that period, AAVE traded below $90 before reclaiming several major levels. The token first crossed $120. Buyers then pushed through $140 and later conquered $150. Each move added confidence to the broader uptrend.
The most important development came when AAVE broke above the $150 to $155 zone. Previous rallies had repeatedly failed in that region. This time, demand proved strong enough to overcome selling pressure. The breakout cleared the path toward $175. That move also pushed AAVE far beyond previous September highs. Technical structure remains favorable for bulls. AAVE trades above major moving averages, reflecting strength across multiple timeframes.
Such positioning often signals strong market confidence. Attention now shifts toward the $180 level. Round numbers frequently attract profit-taking activity. Traders often reduce exposure near those zones after a strong rally. However, price action near $155 may matter even more than the next upside target. Former resistance often becomes support during healthy uptrends. Holding that region would strengthen the bullish case.
Rising Treasury Yields Create a New Challenge for DeFi
While AAVE enjoys strong momentum, broader market conditions remain challenging. US ten-year Treasury yields recently climbed above 5%. Those levels have not appeared for many years. Higher government bond yields create competition for capital that usually flows into riskier assets. Many investors compare returns when allocating funds. Government bonds now offer attractive yields with significantly lower risk.
That reality creates pressure for decentralized finance projects. Some market participants may question whether lending through DeFi platforms remains attractive. Traditional fixed-income products now provide compelling alternatives. Even with those challenges, demand for AAVE has remained surprisingly strong. Buyers continue entering the market despite the changing macro environment.
Recent developments within the Aave ecosystem may have contributed to investor focus. On September 28, a risk proposal recommended adjustments to borrowing conditions for several assets. One proposed change involved USDe borrowing rates. The proposal suggested an increase from 6.3% to 6.6%. The adjustment reflected borrowing activity, available liquidity, and position health.
