AAVE price climbed above $260 on May 20 after spiking 27% WTD, outpacing most large-cap DeFi tokens. The surge followed Bitcoin’s brief push past $107,000 and Ethereum’s climb above $2,500, signaling renewed confidence in the broader crypto market. Risk-on sentiment appears to be back in play, with altcoins and DeFi names drawing capital inflows after weeks of subdued action.
The move comes as total value locked (TVL) in DeFi protocols rises in tandem with Ethereum’s Layer 2 growth and speculation around the Pectra upgrade. AAVE, in particular, has benefited from fresh whale activity and improved on-chain borrowing activity, both of which have helped reinforce its recent price momentum. However, even as the protocol enjoys renewed market attention, a different narrative is also emerging—one that could challenge AAVE’s position in the DeFi lending hierarchy.
Yet these gains aren’t occurring in a vacuum. The project recently inspired a wave of attention both on-chain and on X, thanks to a $150,000 security contest for its V3 deployment on Aptos, and a TVL surge pushing nearly $30 billion.
AAVE Competition and TVL Surge Fuels Momentum
AAVE is back in the spotlight. Two major developments in the past 48 hours have pushed the token to the top of social feeds and protocol charts.
First is the Aptos competition. Security platform Cantina announced a $150,000 prize pool on May 19 for reviewing AAVE V3’s deployment on Aptos. It’s AAVE’s first move outside Ethereum-compatible chains. The code is written in Move. The contest ends on June 9. Researchers are expected to probe the new collateral mechanisms, liquidation logic, and reward incentives.
The goal: stress test AAVE before its mainnet launch on Aptos. Key Aptos figures, including Avery Ching, have backed the initiative on X. The campaign is already seeing engagement from Aptos Labs and Move developers. This is not just marketing—it’s a full-scale security audit powered by open incentives.
The second catalyst is the protocol’s rising TVL. According to The Block and DefiLlama, AAVE’s TVL has surged to nearly $30 billion—up from $20 billion earlier this year. That’s a 50% increase. It also makes AAVE the second-largest dApp by TVL and the top lending protocol on Ethereum. Active loans stand near $10 billion. The debt-to-TVL ratio is around 33%. Daily fees have crossed $1 million.
Together, these two factors are driving momentum. The Aptos rollout adds technical credibility. The TVL growth shows user trust. AAVE is trending again—and not just because of price.
Bulls Test Key Resistance As RSI Flashes Warning
AAVE price extended its rally to $264 on May 20, closing in on a major resistance level near $278. The token gained over 45% in May alone, driven by strong on-chain metrics and renewed DeFi interest. The current leg higher comes after bulls reclaimed the $233 resistance, which now acts as support. That level had capped price action in April and early May.
Price has flipped all key exponential moving averages. The 20, 50, 100, and 200-day EMAs now sit below current price levels, confirming a bullish structure. The 0.382 Fibonacci level near $233 provided the last breakout trigger. The next resistance sits near $278, marked by the 0.618 Fib retracement level. A break above this zone could target the $310 level next, which aligns with the 0.786 Fib zone.
Volume has picked up, but not significantly. RSI currently reads above 75, suggesting overbought conditions. Momentum is strong, but profit-taking risk is rising. If AAVE price fails to break above $278, a pullback toward $255 remains possible. That’s the 0.5 Fib level and a key midpoint between the April highs and current range.
Overall, the trend remains bullish. The structure favors continuation as long as AAVE holds above $233. But the zone between $278 and $310 could act as a supply pocket, especially if market-wide momentum fades. Traders should watch for RSI divergence or high-volume rejection near $278 as early reversal cues.