AAVE: What 12% Upswing Might Mean to Traders Following Harmony’s $100M Hack

The second-largest decentralized finance protocol globally, AAVE, endured a massive blow within the past three months. The hit saw the lending Dapp’s total value locked, plunging to $5.03 billion from $14 billion. That wasn’t all.

Also, AAVE suffered during the latest Harmony attack, which saw fraudsters escaping with $100 million. AAVE might not be in ‘Harmony’ with its challenging patch.

AAVE Not in ‘Harmony’

The exploited Ethereum-Harmony bridge also impacted AAVE V3 Harmony. The protocol felt the heat as it had listed the hacked assets, specifically USDT, USDC, AAVE, and DAI.

Nevertheless, V3 didn’t experience losses as it wasn’t the primary hackers’ target. Its losses emerged from the deteriorating broad market, translating to a 21% drop in its valuation. Nevertheless, AAVE gained 127% within 24 hours, catalyzing investor optimism.

However, it remains unclear whether the rally propels recoveries for the alt as that would need something beyond a green bar. AAVE might witness upticks from $63.07 on its charts with investor support, which is somewhat occasional these days.

Meanwhile, AAVE investors have conducted transactions totaling over $40 million on average, with this metric peaking near $127M as June ended. That emerged regardless of over 89% of AAVE investors experiencing losses for over one year. AAVE investors have never collectively enjoyed profits since January 2021.

What is Next for AAVE?

The mentioned developments started impacting average balances on investor wallets as the overall market remains underpinned in downtrends. Interestingly, AAVE enthusiasts refrained from quitting the market. Meanwhile, the average balance declined from $175.3K in Feb 2021 to $8.1K as of July 4.

For now, the investor’s next move seems unpredictable as AAVE boasts a massive 0.89 correlation with BTC, making it vulnerable to declines besides the rallying opportunity.

As highlighted above, the crypto market presented impressive moves within the past day. While publishing this content, the overall cryptocurrency market capitalization stood at $914.78 billion, reflecting a 5.62% drop within the previous day.

Moreover, Bitcoin gained more than 6% over the past 24 hours to $20,346.34. Nevertheless, that doesn’t imply bearish invalidations.

Stay around for upcoming updates.