Aave has reached an important milestone as its Horizon Real-World Asset market has broken the $200 million level of active borrows, creating a new all-time high. This is an indication that the use of real-world assets in the form of tokens in the decentralized financial sector is gaining momentum.

Source: X

However, this increase reflects the rising confidence in Aave’s Horizon layer, which has been designed with institutional-grade RWAs and a focus on risk management and scalability in mind. With capital continuing to flow into the realm of tokenized assets, Aave’s stance at the crossroads of DeFi and traditional finance could imply that RWAs will become an important catalyst in the next DeFi adoption cycle.

Also Read: AAVE Price Shock: 18% Surge Predicted in 5 Days

ETH Deposits Hit Record, Boosting Aave–Ethereum DeFi

However, the data from Token Terminal highlighted that the DeFi space of Ethereum is seeing a renewed spate of growth, with ETH deposits on the Aave protocol running on the Ethereum mainnet breaking out to a brand-new all-time high. This is indicative of the ever-growing confidence of market participants, including users and institutions, who are embracing the use of DeFi services.

Source: X

This is not only indicative of the positive interdependent relationship between Aave and Ethereum, but it also illustrates how more ETH deposits mean that Aave is able to provide more loans and earn more fees. Conversely, Aave is also providing a use case on Ethereum, and both of these projects are supporting an ongoing cycle of sustainable growth.

AAVE Price Setup Points to an Explosive Rally

However, the crypto analyst, Market Watcher, pointed out that the AAVE on the day chart is still trending within a strongly defined long-term downtrend. The price has maintained a lower high, respecting a trendline that originated from the $350-$360 area. The area set out by $330-$350 continues to be a strongly defined supply zone where buy rallies were strongly sold, thereby maintaining a bearish market trend.

Source: X

Currently, AAVE is hovering around the $173–$175 level after bouncing from the rising long-term support near $145–$155. While this reaction shows buyers defending key demand, the move still appears corrective. A confirmed break above the descending trendline could open the door toward $200–$220, whereas rejection would likely send the price back toward $155, keeping downside pressure firmly in play.

Also Read: AAVE Price Alert: Will Crypto Hit $110 or $72 Next?.

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Filed under: Bitcoin - @ January 7, 2026 3:16 am