Crypto Quill

Uniswap and AAVE emerge as the top DeFi tokens attracting institutional whales, signaling bullish momentum for 2025.

As the cryptocurrency market experiences a pause in its bullish momentum during the first half of December, investors are gearing up for what could be a prolonged rally in 2025. While Bitcoin’s price struggles to maintain its position above the $100k level, institutional investors and whales are positioning themselves for the upcoming surge by accumulating key decentralized finance (DeFi) tokens. Among the most notable names on their radar are Uniswap (UNI) and AAVE, which are gaining attention due to promising technical patterns and growing institutional interest.

Whale Activity Spurs Confidence in DeFi

Recent on-chain data has highlighted significant whale and institutional activity within the DeFi sector. On December 13, 2024, Galaxy Digital, a leading crypto investment firm, made a noteworthy withdrawal of 1.07 million UNI tokens worth $18.9 million and 27,722 AAVE tokens valued at $10.19 million. This move reflects an increasing belief in the long-term potential of these DeFi projects and suggests that institutional investors are positioning themselves for an eventual price breakout.

As the crypto market struggles with short-term consolidation, the accumulation of these tokens by large players signals growing confidence in the broader DeFi ecosystem. In fact, the surge in whale activity could be indicative of a bullish outlook for the sector in the lead-up to 2025.

Uniswap (UNI): Bullish Breakout Points to $30

Among the DeFi tokens in the spotlight, Uniswap (UNI) is showing some of the most promising technical patterns. UNI recently broke out from the $17 resistance level, forming a classic “cup and handle” (C&H) pattern. This technical setup is typically associated with bullish price action, where the price first experiences a period of sideways consolidation (the cup) before seeing a short pullback (the handle) before breaking out to new highs.

Currently trading at around $17.30, UNI has experienced a slight retracement after the breakout. This pullback may provide an opportunity for the token to regain its bullish momentum, setting the stage for a continuation of the rally. If the price sustains its upward trajectory, Uniswap could see an impressive 80% rally, potentially reaching the $30 psychological resistance level.

The C&H pattern often signals a strong trend reversal or continuation, and for UNI, this could mean a sharp move higher, reaffirming its position as a key player in the DeFi space as the market sets its sights on 2025.

AAVE: A Rounding Bottom Signals Further Gains

AAVE, the governance token of the Aave lending protocol, is another DeFi asset showing strong potential for future gains. The token has been performing exceptionally well, with its price surging from $151 to $363 in a matter of weeks — a 140% increase. This price movement is indicative of a powerful recovery rally, and technical analysts are pinpointing the formation of a “rounding bottom” pattern on the charts.

The rounding bottom pattern, also known as a “U” shaped recovery, often signals a shift from bearish to bullish price action. This pattern is typically followed by a period of sustained upward momentum, as market sentiment turns positive and new buyers enter the market. For AAVE, this could mean further upside, with a 22% potential rise towards its immediate resistance level of $447.

In addition to the technical patterns, whale activity has been on the rise for AAVE. According to data from Intotheblock, there were 3,310 transactions last week exceeding the $100k mark. This level of whale interest is reminiscent of activity seen in late 2022, suggesting that institutional investors are once again paying close attention to AAVE and its price action.

Why Whales Are Eyeing Uniswap and AAVE

So, why are institutional investors and whales particularly focused on these two DeFi tokens? Both Uniswap and AAVE are integral components of the DeFi ecosystem, offering significant utility to users within decentralized finance. Uniswap is the leading decentralized exchange (DEX) on Ethereum, allowing users to trade ERC-20 tokens without the need for a centralized intermediary. Its liquidity and widespread adoption make it a cornerstone of the DeFi space.

AAVE, on the other hand, is a decentralized lending and borrowing platform that enables users to earn interest on their crypto holdings or take out loans without the need for traditional financial intermediaries. AAVE’s protocol has gained significant traction within DeFi, and its governance token has long been seen as a blue-chip asset in the sector.

Both tokens are supported by robust ecosystems with real-world utility, making them attractive investments for institutional players who are betting on the continued growth of DeFi in 2025 and beyond.

Market Sentiment and the DeFi Outlook for 2025

Looking ahead, the broader sentiment in the DeFi space is cautiously optimistic. While the crypto market as a whole faces short-term challenges, including Bitcoin’s struggles to maintain its $100k level, the long-term outlook remains positive. Many investors believe that the consolidation phase could set the stage for a strong rally, with DeFi tokens like UNI and AAVE playing a key role in that recovery.

Galaxy Digital’s large-scale withdrawals and other institutional movements suggest that the DeFi sector is likely to see continued growth and adoption. As more players enter the space and decentralized financial services become more mainstream, the demand for tokens like Uniswap and AAVE is expected to rise.