• AAVE recently passed a proposal for voting on whether the asset should move to the Aptos chain.
• Liquidity flow has been on the rise as well, setting the tone for a potential market rally.

Buyers are gradually accumulating Aave [AAVE], as reflected in its 3.34% price jump over the past 24 hours, which is a major turnaround from its 18.69% decline over the past month.

Of course, market sentiment has turned optimistic as liquidity improves and a key protocol upgrade gains traction within the ecosystem.

Ecosystem upgrade could benefit AAVE

The Aave V3 protocol has made an announcement, currently under governance voting, to debut on its first non-Ethereum-compatible chain, Aptos [APT].

Aptos boasts speeds of 150,000 TPS—far eclipsing Ethereum’s [ETH] 12–15 TPS. This upgrade could unlock faster execution, drive user growth, and attract deeper liquidity.

AMBCrypto found that sentiment remained bullish following the announcement, fueling expectations of a sustained rally.

AAVE attracts fresh market liquidity

There has been a gradual rise in the total value locked (TVL) in AAVE over the past few days. TVL measures a protocol’s valuation.

When high, it implies more investors have deposited into its smart contracts, signaling growing conviction.

AAVE’s V3 TVL has moved from $26.574 billion as of the 11th of April to $28.075 billion at press time, an approximate $1.5 billion increase during this period.

Liquidity inflow gains pace

This liquidity injection may be tied to rising activity. According to IntoTheBlock, Active AAVE Addresses crossed 174,840, pointing to fresh retail participation.

Moreover, investors purchased 7,910 AAVE, worth over $1 million, in the last 24 hours alone. As Exchange Netflows flipped negative, it hinted at long-term holding over short-term speculation.

A negative Exchange Netflow implies these AAVE tokens were purchased and moved into private wallets for long-term holding, adding to the possibility of a market surge.

Derivatives also lean bullish

Derivative traders are aligned with the majority of bullish investors in the market.

At the time of writing, bulls in the Futures market have taken control, as the OI-Weighted Funding Rate, which gauges Open Interest and Funding Rates to determine market direction, remains positive.

A positive reading of this metric indicates that most AAVE contracts are from long traders anticipating a price increase.