Can AAVE crypto reach $200? THIS overbought signal raises concerns

In essence, $AAVE’s move toward $200 doesn’t look like a straight-line rally.

The main question is what is fueling $AAVE crypto’s upside. As mentioned above, more than 60% of its monthly gains are coming from rotational flows, meaning that capital moving from $BTC to $AAVE appears to be a critical factor.

So, if $BTC.D breaks out and capital starts flowing back to $BTC, could that put pressure on $AAVE crypto? From a technical perspective, a change in flows could reduce $AAVE/$BTC momentum and make the path to $200 more challenging, especially with the altcoin already looking stretched.

$AAVE crypto’s on-chain momentum puts fuel to the rally

$AAVE’s on-chain setup could be giving a different perspective.

In a post on X, the company announced that Aave saw $1.1 trillion in borrow volume. Thus, the demand for lending services on the platform appears to be robust, while its technicals appear to be stretched.

What can support this view is the chart below. According to DeFiLlama data, $AAVE crypto closed last month with on-chain figures returning to where they were seen in early June. TVL peaked at almost $20 million, up 18% from the previous month, while fees crossed $37 million, climbing 15% from the same period last year.