What happened
The Aave (CRYPTO:AAVE) The cryptocurrency is rising rapidly in trading on Saturday. The token was up roughly 11% over the previous 24-hour period at 1 pm ET.
While many other altcoins have also posted moderate gains in today's trading, the Aave token's huge price advance appears to stem from new excitement on social media. Coin Bureau's YouTube channel posted a video outlining Aave's bullish coverage on Friday, and the analysis and attention are driving gains for the token.
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And that
Coin Bureau's YouTube channel has approximately 1.87 million subscribers, and their recent bullish coverage on Aave is generating buzz. In the video, the channel host points out a relatively weak performance for coins with a focus on decentralized finance (DeFi), upcoming Aave blockchain upgrades, and the network's upcoming social media platform as driving factors for a potential rally. The Coin Bureau host also stated that the "fair valuation" of the coin could be $1,000, suggesting an advantage of about 317% based on the current price of the token.
Aave is still a relatively small cryptocurrency, and it is not unusual to see smaller tokens post dramatic moves with little to no news. Favorable coverage from a popular cryptocurrency analysis source can often be enough to trigger significant price gains, and Aave is currently benefiting from this effect.
Now what
Is EtherealThe token-based token offers digital currency lending services with unique features, such as switching between fixed and variable interest rates on demand.
Despite recent gains, the token price is down about 64% from the high it hit eight months ago. Like many other cryptocurrencies, Aave has been caught up in the recent pullback of the broader market. The cryptocurrency now has a market cap of approximately $3.2 billion and ranks as the 48th largest cryptocurrency by market value.
While it is possible that the Aave token could rise significantly above current levels, investors should proceed with the understanding that it remains a high-risk investment even though it is trading substantially lower from its peak. Calculating objective valuations for publicly traded companies that publish regular reports on earnings, assets, and liabilities is already an imprecise science and involves guesswork, and it's even more difficult when it comes to cryptocurrencies. Aave could very well bounce back and make big profits, but it's generally a good idea to take price targets with a grain of salt.
This article represents the opinion of the writer, who may disagree with the "official" recommendation position of a Motley Fool premium advisory service. We are motley! Questioning an investment thesis, even one of your own, helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
