What does this chart tell us about the recent price push?
Update on chart analysis "USDT Balance Lending & Borrowing Protocol"
Looking at the chart, we can see that every time the purple line drops suddenly, there are signs of a rebound. So, what is the reason?
Looking back at the past, during previous sudden drops, this purple line always tended to reverse and rise higher than the initial peak before the sharp decline (marked with red and green circles in the image). This indicates that borrowed funds from this platform, after being used to push the market price, are immediately settled, including both principal and interest.
However, after last week's price push, funds from the #AAVE platform, after being used to push, have only been partially withdrawn (about half) and are showing signs of continuing to decline -> This proves that a portion of the funds is staying in the market, helping to strengthen the sustainable upward trend in the medium and long term.
Currently, we are just waiting for the purple line to drop below 0 and go sideways to officially confirm the market's medium to long-term upward wave.
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Read this article to find out whether today's market rally can sustain in the long term.
Analysis and evaluation of today's market rally
Today's market push largely stems from $USDT balances on the two L&B platforms, #AAVE and #Morpho.
Analysis and a look back at the past of the two balance lines on the L&B platform:
#Compound: When the green line breaks below 0 and shows signs of flattening underneath, it indicates that funds are flowing directly into the market. We can observe this during the period from mid-November to the end of December last year (image).
#AAVE: The pink line is currently recording a rapid and sudden decline, indicating that funds from #AAVE are also being strongly withdrawn to push market prices. In all three previous instances when this line dropped suddenly, the market experienced short- and medium-term rallies (image).
However, for the market to rise strongly and remain stable in the long term, both of these lines need to flatten below 0 for an extended period. Currently, only the Compound line confirms this; let's wait and see the reaction from the #AAVE line.
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