- Whale activity signals a possible shift in sentiment as major AAVE holders lose assets.
- Technical indicators point to bearish momentum, although on-chain engagement metrics show steady interest.
Aaf [AAVE]a top player in decentralized finance (DeFi), is currently facing increased selling pressure as prominent investors – often referred to as “whales” – shed significant assets. Recent data highlights large transfers to exchanges including Binance, MEXC and OKX.
Notably, 25,790 AAVE worth $3.39 million and 7,822 AAVE worth $1.04 million were sent to MEXC and Binance respectively. In addition, Cumberland and Galaxy Digital, two major institutional players, deposited 10,000 AAVE and 7,897 AAVE respectively.
At the time of writing, AAVE was trading at $129.58, up slightly 0.14% over the past day. This wave of large trades begs the question: is AAVE experiencing a short-term dip, or is this the start of a larger shift in sentiment?
Technical analysis: is there a further decline on the horizon?
Technical indicators offer a mixed outlook for price movements. The Bollinger Bands (BB) show increased volatility, with price approaching the lower band, indicating bearish momentum. This downward pressure could lead to further declines if selling continues.
Meanwhile, the Relative Strength Index (RSI) stands at 35.89, bordering on oversold territory, which often attracts buyers looking for value.
However, without stronger buying activity, the bearish trend could continue. Therefore, traders should be cautious, especially if the price remains close to the lower Bollinger Band.
Source: TradingView
AAVE active addresses and number of transactions
Despite the whale-induced selling pressure, on-chain metrics indicate steady engagement. The number of transactions currently stands at 2,67,000, a modest increase of 1.03% in the last 24 hours, while active addresses have grown by 1.08% according to CryptoQuant.
This uptick in activity could indicate that smaller investors are still interested, countering selling pressure from larger players. However, the increase in the number of active addresses may not be enough to offset the impact of whale movements unless retail purchasing intensifies.
Source: CryptoQuant
AAVE liquidations: could this lead to further volatility?
Liquidation data adds a crucial dimension to AAVE’s prospects. According to the latest report, $106.21K worth of shorts and only $22.87K of longs were liquidated on platforms such as Binance, OKX and Bybit.
This imbalance signals prevailing bearish sentiment as traders continue to hedge against further downside developments. If these liquidations continue, they could increase selling pressure, especially if stop-loss orders are triggered on long positions.
Source: Coinglass
Read From Aave [AAVE] Price prediction 2024–2025
In conclusion, AAVE is going through a challenging period characterized by significant whale activity, technical bearish signals and a large number of liquidations. The combination of the whale sell-off and technical indicators is tilting towards a cautious outlook.
However, the steady increase in the number of active addresses and transactions shows that the retail sector’s interest remains. Whether the current selling pressure results in a long-term downtrend or a temporary dip will likely depend on retail purchasing power and further whale movements.
