Aave (AAVE), a prominent decentralized finance (DeFi) protocol, is navigating a period of intense selling pressure as large-scale investors, commonly known as “whales,” have started offloading significant AAVE holdings. Recent on-chain data reveals substantial AAVE transfers to major exchanges, such as Binance, MEXC, and OKX, raising concerns over whether AAVE is experiencing a short-term correction or signaling a potential longer-term trend.
Whale Activity Escalates Selling Pressure On AAVE
Over recent days, several high-value transfers have caught the market’s attention. A substantial 25,790 AAVE tokens, valued at approximately $3.39 million, were sent to MEXC, while Binance received an additional 7,822 AAVE tokens worth $1.04 million. Furthermore, major institutional players like Cumberland and Galaxy Digital have also made notable deposits of 10,000 and 7,897 AAVE tokens, respectively, further amplifying sell-off concerns.
At the time of writing, AAVE is trading at $129.58, reflecting a marginal 0.14% gain over the last 24 hours. However, the whale-driven selling activities could keep downward pressure on AAVE’s price, raising questions about whether this is simply a short-term dip or a shift toward a bearish sentiment.
Technical Indicators Point to Mixed Outlook
AAVE’s technical landscape currently shows mixed signals. The Bollinger Bands (BB), a volatility indicator, suggest growing volatility as AAVE’s price approaches the lower band, typically associated with bearish momentum. Should selling pressure from whales continue, AAVE could see further declines, as it edges closer to oversold territory.
The Relative Strength Index (RSI), another key metric, is currently at 35.89, nearing oversold levels. This threshold often attracts buyers looking for discounted entry points, which could temporarily stabilize AAVE’s price. However, without a significant increase in buying activity, the bearish outlook could prevail, especially if AAVE’s price continues to hover near the lower Bollinger Band.
Despite heightened selling pressure, AAVE’s on-chain metrics reveal a resilient level of activity. CryptoQuant reports that transaction counts have risen by 1.03% to 2.67K in the past 24 hours, and active addresses have increased by 1.08%. This suggests that smaller investors remain engaged, counterbalancing some of the selling pressure from whales. However, retail buying interest would need to intensify to offset the bearish trend significantly.
Also Read: Aave (AAVE) Eyes Rebound After 6% Dip – Key Indicators Signal Potential 12% Rally Ahead
Liquidations Add to Bearish Momentum
Liquidation data further emphasizes the bearish outlook for AAVE. In recent activity, $106.21K worth of short positions and only $22.87K in long positions have been liquidated across platforms like Binance, OKX, and Bybit. This imbalance reflects a prevailing bearish sentiment, as traders hedge against further downside. Should these liquidations continue, they could trigger additional sell-offs, especially if stop-loss orders are hit on long positions.
AAVE currently faces a complex situation with whale-driven sell-offs, bearish technical indicators, and a high volume of liquidations. While on-chain metrics show that retail interest remains steady, it may not be sufficient to offset whale activity unless buying momentum from smaller investors strengthens. For now, AAVE’s trajectory depends on the extent of retail buying and whether whales continue their selling trend. Traders should monitor these factors closely to gauge whether AAVE is in for a prolonged downtrend or a temporary correction.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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