Aave has experienced remarkable growth, positioning itself as the leading gainer among the top 100 cryptocurrencies, thanks to a general bullish trend in the market.

Aave (AAVE) jumped 34% within the last 24 hours, currently trading at $355. This surge has propelled the native token of the prominent lending protocol’s market capitalization to $5.3 billion, ranking it as the 31st largest cryptocurrency.

4 reasons behind Aave’s rally to 40-month highs - 1
Source: crypto.news

This marks the first occasion since late August 2021 that Aave has surpassed the $350 threshold.

Initially, the broader crypto market, inclusive of Bitcoin (BTC), began to rise following Wednesday’s U.S. Consumer Price Index report.

The U.S. inflation rate for November was reported at the anticipated 2.7% year-over-year, a slight increase of 0.1% from October’s 2.6%, as per data from Investing.com.

In response, Bitcoin once again crossed the $100,000 mark, and the global cryptocurrency market capitalization saw a 4% increase, reaching $3.82 trillion, according to data from CoinGecko.

Secondly, several new developments have fostered bullish sentiment for Aave, with its decentralized finance total value locked standing at around $22 billion.

Balancer revealed an upgrade to its decentralized exchange and automated portfolio management protocol, launching v3 in collaboration with Aave, according to crypto.news on Wednesday. This partnership aims to enhance the liquidity pools of Balancer v3, providing users with opportunities to optimize yield.

Additionally, Aave is set to launch on Linea, a zk-rollup network backed by Consensys, after receiving approval from its community. This development will facilitate Aave’s scaling efforts and improve transaction throughput while reducing fees.

In a third notable move, President-elect Donald Trump’s DeFi initiative, World Liberty Financial, acquired $1 million worth of AAVE tokens at an average price of $297.8 earlier today.

Lastly, Aave’s whale accumulation intensified as the price dipped below the $260 mark on Monday. As per IntoTheBlock data, large holder net inflow for the asset hit 103,610 AAVE on Dec. 9.

4 reasons behind Aave’s rally to 40-month highs - 2
AAVE whale net flow | Source: IntoTheBlock

Sudden increases in whale inflows often trigger FOMO among retail investors, potentially driving prices higher.

Disclosure: This article is for educational purposes only and should not be interpreted as investment advice.