$16M inflows fuel AERO’s price rally, but should you have short-term concerns?

Key Takeaways

Liquidity injections from smart money, coupled with inflows from derivative and spot investors, have strengthened AERO’s bullish phase. Recent trades into resistance levels, however, place it in a tight zone with a higher risk of decline.

Aerodrome Finance [AERO] hiked by 8.5% in the last 24 hours as liquidity inflows climbed to a major high.

Smart money, derivatives, and spot investors collectively injected over $16 million into the asset. Now, while that might be good news, according to AMBCrypto’s analysis, a major hurdle may be ahead as well.

Smart money backs AERO!

Smart money, known for profitable bets, turned its attention to AERO amid a sharp rise in liquidity.

In fact, according to Nansen, AERO was the most purchased token in the last seven days. This group collectively bought $785,000 worth of AERO, while available liquidity stood at $52 million – The highest in the market, at the time of reporting.

Source: Nansen

When smart money takes strong positions in an asset like AERO, the likelihood of a notable rally rises. Especially given their track record of winning trades.

Derivatives and spot markets see strong inflows

The derivative market has seen the largest inflows into AERO. In the last 24 hours alone, derivative investors added over $16 million. This pushed Open Interest up 16% to slightly above $100 million.

Source: CoinGlass

This surge coincided with the OI-weighted funding rate rising to 0.0184%. A positive and elevated OI-weighted funding rate means that most of the liquidity is entering from long traders anticipating a rally.

The spot market also highlighted strong activity. According to Coinglass, the Netflows on spot exchanges over the past 48 hours stood slightly above $1 million, with investors favoring private wallets for long-term holding.

If sentiment across both spot and derivative markets holds, AERO’s price could extend its upside on the charts.

Is there a resistance ahead?

Despite bullish inflows, however, AERO faces a key resistance level ahead. At the time of writing, the crypto was yet to trade at this level.

This resistance is marked by the Fibonacci retracement line. Analysis also revealed that additional resistance levels remain close by, even if AERO overcomes its press time ceiling of $1.47.

Source: TradingView

Failure to break above the resistance could drag the token back to its nearest support level of $1.25.

Ultimately, AERO’s next move depends on market momentum. A surge in volume would confirm a potential breakout rally.

At press time, however, the trading volume had fallen by 40% to $127 million – A sign that while a rally remains possible, the probability may be slim.