AAVE Price Rebounds from Key Support on Whale Accumulation, but Momentum Weakens

The price of AAVE, the native token of the Aave protocol, experienced a sharp recovery after hitting the $240 support level. This rebound comes after a significant drop from $264 the previous day. On-chain data indicates that large-scale investors, often referred to as whales, have been actively accumulating AAVE, which has provided a temporary boost to the price. However, fading momentum indicators suggest potential challenges ahead.

Whales Accumulate Over $7.5 Million in AAVE

Recent blockchain data reveals substantial whale activity driving the rebound. Two prominent whale wallets collectively acquired 29,739 AAVE tokens, worth approximately $7.5 million, within a span of 14 hours. One of these wallets borrowed $5 million in USD Coin (USDC) from the Aave protocol to purchase 19,608 AAVE, increasing its total holdings to 280,673 AAVE. The second whale borrowed $2.5 million in GHO to purchase 10,131 AAVE, bringing its total holdings to 120,513 AAVE.

Such large-scale buying activity often signals bullish sentiment among institutional or high-net-worth investors. However, technical indicators suggest the market may face resistance in maintaining upward momentum.

Technical Analysis: Momentum Indicators Show Weakness

On the daily chart, AAVE is currently testing a crucial support zone between $248 and $250, which aligns with the 20-day Exponential Moving Average (EMA). Despite the overall bullish structure, which has seen higher highs and higher lows since April, momentum indicators are turning bearish.

  • The Moving Average Convergence Divergence (MACD) has crossed into bearish territory, with a widening negative histogram.
  • The Relative Strength Index (RSI) has declined from overbought levels and is now hovering slightly above 50, indicating waning bullish momentum.

If AAVE fails to hold the $248 support level, it could face additional downside pressure. Key support levels to watch include $235 and $220, both of which have previously acted as strong support and consolidation zones.

Potential Scenarios: Support vs. Resistance

The next few trading sessions will likely determine AAVE’s short-term trajectory. If the current support level holds, bulls may attempt to reclaim higher levels, targeting the $280 resistance zone. Conversely, a close below $248 could signal a deeper correction, with bears eyeing the aforementioned support levels at $235 and $220.

While the medium-term trend for AAVE remains bullish, the current pullback is a critical test of market strength. Investors should closely monitor key levels and indicators for further insight into the token’s price direction.

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