Aave Price Surge Raises Concerns as Overbought Conditions Loom

Aave's (AAVE) price has surged over 20% in the past week, and it's one of the top performers in the weekly ranking. The altcoin has regained its footing from the beginning of January, pushing above $180.

However, with technicals now overbought, the push towards $200 may see increased profit-taking pressure if momentum slows down. AAVE/BTC has gained 10%+ this month for the fourth consecutive week, indicating strength relative to Bitcoin (BTC).

The main question is what's fueling Aave's upside. More than 60% of its monthly gains come from rotational flows, meaning capital moving from BTC to AAVE appears crucial.

Aave's on-chain momentum could provide a different perspective. The company announced that it saw $1.1 trillion in borrow volume, indicating robust demand for lending services on the platform.