Here’s why AAVE could continue its ongoing rally.

• Open interest in Coinglass is rising and is at its highest this year, indicating an influx of new money.
• Daily Active Sentiment addresses are rising, signaling a bullish move.
• Investors should be wary of spikes in the net Profit/Loss measurement.

AAVE (AAVE) rose 15% on Monday and maintained its upward momentum with a 3.5% gain to $133.42 for the third day in a row on Wednesday. On-chain data shows that AAVE’s open interest data and daily active addresses are rising, signaling the continuation of the bullish trend.

AAVE price is gaining traction as on-chain data suggests a positive trend

Data from CoinGlass shows that AAVE futures open interest (OI) on exchanges is also increasing. OI indicates the total number of outstanding derivative contracts that have not been settled (settled by delivery) and whether the cash flows in the contract are increasing or decreasing.

OI growth represents new or additional money entering the market and new purchases, suggesting an optimistic trend. When OI falls, it is usually a sign that the market is liquidating, more investors are leaving and the current price trend is ending.

The chart below shows that AAVE’s OI increased from $106.24 million on Monday to $177.55 million on Wednesday, the highest OI since the beginning of this year. This indicates that new or additional money is entering the market and new purchases are taking place.

AAVE Open Interest chart

Santiment’s Daily Active Addresses Index helps track network activity over time. An increase in the metric signals greater use of the blockchain, while a decrease in addresses indicates lower demand for the network.

In the case of AAVE, Daily Active Addresses increased by 65% ​​from Monday to Wednesday. This increase is the largest since the end of December 2023 and indicates that demand for AAVE’s use of the blockchain is increasing, which could propel AAVE’s price up.

Daily AAVE chart with active addresses

Additionally, Coinglass’s long-short ratio is 51.06%. This report suggests bullish sentiment in the market, as the over 50% number suggests that several trades anticipate the AAVE price to rise.

Long-short AAVE ratio graph

Despite new acquisitions, increased blockchain usage, and growing sentiment, AAVE’s Net Profit/Loss measurement shows upward growth. This indicates that its holders are, on average, selling their holdings at a significant profit. Accordingly, investors should not anticipate an immediate price increase for the token.

AAVE network profit/loss chart