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Aave Locks Multiple Lending Markets

Aave Freezes Lending Markets

Aave, the largest lending protocol on Ethereum, has passed a proposal to temporarily freeze markets for 17 tokens after suffering market manipulation attack.

Aave, the largest lending protocol on Ethereum with more than $3.65 billion in assets across multiple chains has temporarily frozen lending markets for 17 tokens in an effort to protect itself from taking on bad debt due to market manipulation.

Restricted markets include Curve, Yearn, 0x, Decentraland, 1inch, Ampleforth, DeFi Pulse, renFIL, Maker, Enjin, xSUSHI, BAT and stablecoins – sUSD, GUSD, RAI, USDP, LUSD.

A proposal was passed after a trader opened a massive short position on Curve (CRV) that resulted in $1.6 million of bad debt for Aave.

“In response to recent market events and the continued contraction of liquidity across markets, this proposal seeks to reduce the risk profile across many higher volatile assets,” the proposal said.

Last week, a trader borrowed 92 million CRV ($57 million) on Aave and started selling the tokens, causing a fall in CRV price.

However, the trader suffered a squeeze as the CRV token price rallied. Aave accrued a bad debt of $1.6 million while liquidating the short position.

Aave stated it had sufficient funds to make up the bad debt, but action was needed to prevent such incidents from happening by freezing low-liquidity asset pools.

Checking The Charts

  • $AAVE S/R – Support & Resistance
  • $CRV S/R – Support & Resistance
  • $BTC Monthly Outlook
  • $ETH Monthly Outlook

$AAVE S/R – Support & Resistance

AAVE Weekly Chart

$CRV S/R – Support & Resistance

CRV Weekly Chart

$BTC Monthly Outlook

BTC Monthly Chart

Another monthly close is almost in the books, and it’s unlikely that we start seeing improvement any time soon. Bitcoin continues to face fallout from the FTX saga. There’s no good news, and more importantly no signs or narrative to get people buying. Price refuses to go up and keeps moving lower on higher time frames. The next major level of interest is 2017’s highest monthly closing price around 13,899.

Focusing on monthly charts tends to provide greater clarity on how the market at large is feeling, right now…my read is the market is not feeling good. But that can change month to month, my opinion is that nothing interesting happens till next year.

$ETH Monthly Outlook

ETH Monthly Chart

Ethereum monthly is in a similar position to BTC, but it hasn’t marked down as much yet. If this level doesn’t hold, I see us going down further. It really depends on the broad macro picture right now. I will give Ethereum credit for holding up better than Bitcoin. If Eth breaches 1000 convincingly, I suspect we may see a fast markdown to sub $500, we’ve already breached once.

Everything depends on the ongoing news surrounding FTX, and whether or not the world heads into global recession. There will be plenty of time to buy the dip and get long. During the last bear market, ETH went down 94% and currently it’s only down 81% at the lows. Stay vigilant, and don’t feel rushed with your entries.

Free Beginner’s Guide to Learning Technical Analysis
Free Beginner’s Guide to Technical Analysis

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