Last week, the crypto market noted significant liquidations. This particularly affected Moonwell users employing yield strategies that involved borrowing AERO crypto tokens.
These strategies, while potentially profitable, expose users to high volatility, with AERO’s price fluctuations often exceeding 100%.
The liquidation volume charts showed a sharp spike, especially around mid-November. This highlights the heightened risk when AERO‘s price movement intensifies.
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Source:X
This pattern suggested that users locking AERO crypto to earn returns found themselves unable to repay loans due to these price surges, leading to liquidations.
AERO crypto’s price is prone to drastic changes. Therefore, the strategy of locking tokens for returns poses a substantial risk to investors.
This is critical in a market where liquidity is crucial for maintaining positions. As the market enters key moments, caution is needed, considering the potential for sharp declines or spikes that could lead to further liquidations.
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AERO Crypto Volume and its Revenue Sharing
Aerodrome Finance experienced its largest payout this week, distributing a record-breaking $9.04 Million to its veAERO token holders.
This latest payout marked a 300% increase from just two months prior, setting back-to-back records for total rewards. This includes both fees and incentives.
The increase coincided with an impressive surge in trading volume, reaching $6.134 Billion, the second-highest in the platform’s history.
This significant growth stemmed from Aerodrome’s unique revenue-sharing model. 100% of protocol revenues are returned to veAERO voters as incentives.
This makes it a lucrative option for liquidity providers and governance participants.
The incentives are structured to encourage long-term holding and active participation in governance decisions, influencing the protocol’s development and strategy.
Such reward mechanisms are instrumental in maintaining high engagement levels among participants. Subsequently, this directly impacts the platform’s overall liquidity and trading activity.
This cycle of reinvestment and reward attracts more users and capital to Aerodrome, setting it apart from competitors. This signals emerging dominance in the decentralized finance (DeFi) space.
Coinbase Ventures AERO Purchase and Price Prediction
Again, Coinbase Ventures continued to make huge investments in AERO, acquiring $3.3 Million worth of AERO crypto and locking it up. Total holdings stand at approximately $14 Million.
This strategic acquisition by one of the leading venture firms in the cryptocurrency space indicated growing confidence in AERO’s potential for price appreciation.
Coinbase Ventures wallet activity | Source: X
Over the past several months, AERO had shown a notable reversal in its trading pattern, indicating strong bullish sentiment.
Initially, the price stabilized at a key support level of $1.05, which spurred a steady increase in its valuation.
Following a trough in June, AERO crypto began a commendable ascent, consistently forming higher lows along a clearly defined upward trend line.
The momentum continued through September, with AERO surging past the $1.60 price mark.
AERO/USDT daily chart | Source: TradingView
A previously challenging resistance at around $1.63 needs to be effectively surpassed, turning it into a potential support level for future pullbacks.
AERO’s rally could approach its former peak at $2.37 near the crucial $2.40 resistance area. As of press time, AERO crypto was consolidating at around $1.29.
If buying pressure is sustained and the potential support trendline, AERO could be well-poised to breach the $2.40 level and set new highs, especially in light of recent substantial investments signaling confidence in its upward trajectory.
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