Aave [AAVE] is sending shockwaves in the decentralized finance (DeFi) space.

Being the leading on-chain lending protocol, the altcoin is witnessing incredible upward price momentum as much as network activity.

Aave [AAVE] is sending shockwaves in the decentralized finance (DeFi) space, with the leading on-chain lending protocol witnessing both incredible upward price momentum and a surge in network activity.

This week alone saw AAVE’s price rise by a staggering 11%, and the altcoin is quickly grabbing the attention of traders and long-term investors.

The protocol’s growth also comes amid broader bullish sentiment within the DeFi space, which is heating up due to higher user participation, lending demand and growing interest in decentralized applications (dApps).

A closer look at Aave’s on-chain metrics reveals a deeper picture of this rally.

TVL reaches record-breaking heights

One of the primary signs of this momentum is Aave’s Total Value Locked (TVL), which stood at around $25 billion at press time. This is a clear indication of increased investors interest and massive capital influx.

A rising TVL usually signifies user activity and trust, two of the most significant indicators for a DeFi protocol’s success.

AAVE’s elevated TVL reinforced it as a market leader in lending, with investors committing more assets to the protocol, showcasing improved willingness to partaken in decentralized borrowing and lending.

Source: DeFiLlama

Trading volume and fees confirm bullish case

Another bullish indicator is the jump in trading volume and daily fees for AAVE. The network recently saw over $10 billion of active loans on the books.

Such intense activity on the borrowing side demonstrates heightened on-chain utility and usage in real life, adding more credibility to its projected rally.

Moreover, higher trading creates more fees, which contribute to protocol revenue.

The increased daily fees from this heightened trading activity benefit stakers and token holders, boosting the fundamental appeal of the altcoin among its investors.

Source: Sentora

Will AAVE break past the $265 supply zone?

With all signals leaning to market momentum, the question now is whether AAVE can break through the current supply zone at around $265.

The positive on-chain metrics, including TVL growth, trading fees and loan volume, bode well for the continuation of this bullish trend.

If AAVE continues advancing in this manner, a possible breakout from its current resistance level seems likely. However, traders should remain attentive to overall market signals and Bitcoin trends, which ultimately influence altcoin rallies.

Currently, AAVE appears poised to post further gains—especially if this DeFi strength keeps sending it upward.