Whales Selling AAVE: Price Crash Coming?

The $159 level is a critical support level for Aave (AAVE) to watch, a break below which could send the price down towards $128. AAVE commands 65% of the DeFi lending market, while its TVL has hit new highs every month since December.

Two whale wallets deposited over 41,000 AAVE tokens to CEX in the past 24 hours.

Analysts claim that AAVE could fall further to $128 if it falls below $159.

AAVE, one of the most dominant DeFi lending protocols, has seen a sharp increase in whale activity, raising concerns about a potential price crash.

While prices are currently rising, advice from key players in the massive flow of AAVE tokens suggests that traders should remain cautious.

Whale activity raises red flags

Blockchain analytics platform Lookonchain reports heavy selling from two whale wallets. Address 0xd282 deposited 30,001 AAVE ($4.98 million) to FalconX and currently still holds 37,425 AAVE ($6.33 million), for a total profit of $11.8 million.

Similarly, 0x1AdC transferred 11,018 AAVE ($1.86 million) to OKX, trading at a loss of $293,000. These transactions suggest that large traders are either taking profits or exiting their positions, which could put downward pressure on the price of AAVE.

However, Kiraverse, a multiplayer game based on Unreal Engine 5, later questioned this claim, claiming that at least one of the transactions was part of a strategic move.

The game claims that the tokens were "reacquired" through different wallets. If true, this would alleviate the pessimistic view of the 40th largest digital asset.

AAVE Price Analysis

AAVE is trading at $166.29 at press time, up 7.18% in the past 24 hours, according to CoinMarketCap. The 20-day exponential moving average (EMA) resistance at $17,784 remains strong.

Meanwhile, the relative strength index (RSI) reading is 41.28, which means it remains in neutral to oversold territory.

There could be some room for a rebound, but a break below 40 could mean more downside pressure for AAVE.

AAVE price action is currently hovering around the lower Bollinger band at $157.72, which is a key support level. If this level holds, a rally to the middle band ($174.81) or the upper band ($191.90) is possible.

However, if the price falls below $159, a further drop to $128 is possible, according to analyst Reed Carson’s assessment.

Does AAVE have long-term potential?

Regardless of short-term bearish trends, AAVE continues to dominate the DeFi space, controlling approximately 65% of the market share in the digital asset lending space, according to data from blockchain analytics platform Token Terminal.

DefiLlama reports that the total value locked (TVL) on AAVE (in ETH terms) has hit new all-time highs every month since December, highlighting its growing adoption.

This fundamental strength suggests that while AAVE may see short-term price volatility, its long-term outlook remains strong.

If the price tests the $128 level and buyers step in, then this could present an attractive long opportunity for traders.