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Aave starts $50mln buyback: What this means, and mapping the effect on price
Aave has initiated a token buyback program of $50 million per annum, with a weekly spend of $1 million. This move is likely to instill investor confidence and potentially trigger a supply squeeze, driving up the asset’s value. Since its announcement, the market has reacted swiftly, reflecting a growing accumulation of AAVE from investors who believe this development will lead to increased price growth.
The buyback program comes as a significant shift in the protocol’s fee structure, aimed at promoting a positive sentiment and creating an upward trajectory for the token. Withdrawing $50 million from circulation every year could put downward pressure on the token’s supply, thus driving up demand and ultimately leading to higher prices. As of now, this effect is already being witnessed as investors accumulate AAVE in anticipation of future gains.
Over the past seven days, $13.98 million worth of AAVE has traded hands, with a staggering $4.30 million of that amount being transacted within the last 24 hours alone. This substantial increase in trading volume and the growing accumulation in the market suggests that investors are hopeful about the token’s potential to rise. The four-hour chart also confirms this sentiment, as it displays AAVE trading within a symmetrical triangle pattern with converging support and resistance levels, indicating a strong possibility of a price breakout.
In the event of a successful breach of the upper resistance line, prices are expected to skyrocket between $170 and $187. Furthermore, if market momentum remains strong, we could potentially see AAVE return to its previous high around the $200 mark.
To conclude, this significant shift in the fee structure, combined with investors’ growing confidence in the token’s potential for growth, has led to an increased accumulation of AAVE.
Source: https://ambcrypto.com/aave-starts-50mln-buyback-what-this-means-and-mapping-the-effect-on-price/
