- Whale interest in AAVE rose as its price moved upward.
- Network Growth and velocity declined, which could affect the token in the future.
Aave [AAVE] has had a tough time standing toe to toe with other prominent DeFi protocols in recent times. However, despite this, whales have shown an interest in the AAVE token.
Whales swim in
As per Lookonchain’s data, a large crypto holder took out 70,000 AAVE worth $6.93 million from Binance [BNB] on the 7th of November. Over the past 24 hours, this whale had withdrawn a total of 140,100 AAVE, equivalent to $13.88 million, from Binance.
The whale withdrew another 70,000 $AAVE($6.93M) from #Binance 5 mins ago.
And has withdrawn a total of 140,100 $AAVE($13.88M) from #Binance in the past 24 hours.https://t.co/t0C1PjdqKM pic.twitter.com/vg21VK2NLg
— Lookonchain (@lookonchain) November 7, 2023
The significant withdrawal of tokens could have a widespread effect on Aave.
Positively, it might indicate that this whale investor has confidence in AAVE’s potential value, leading to a higher market price. However, such large withdrawals can also cause a temporary drop in AAVE’s price due to decreased liquidity.
On the negative side, such massive token movements can create price volatility and uncertainty in the market. It may also lead to concerns about centralization if a few large holders control a significant portion of AAVE tokens.
In the long run, Aave’s success relies on attracting a diverse user base, so extensive withdrawals by a single entity can raise concerns about decentralization and the health of the ecosystem.
As per AMBCrypto’s analysis, AAVE’s price action had been showing multiple higher highs and higher lows. This indicated that the price was slowly showcasing a bullish trend.
Moreover, at the time of writing, the token was trading at $95.972. However, the Network Growth of the token had fallen materially during this period. This implied that the new addresses were losing interest in AAVE.
If the trend continues, it would be hard for AAVE to break past its resistance levels.
The velocity of the token had also fallen. This suggested that the frequency at which AAVE was being traded had declined. The low velocity could be another factor that could hinder the progress of AAVE going forward.
Source: Santiment
Realistic or not, here’s AAVE’s market cap in BTC’s terms
However, it was a positive sign that AAVE was able to maintain its bullish momentum, despite recent developments. Recently, Aave, faced a problem and had to halt certain markets on the 4th of November.
This issue affected different networks, including Aave V2 on Ethereum [ETH] and Avalanche [AVAX]. Also, assets on Polygon [MATIC], Arbitrum [ARB], and Optimism [OP] felt its impact.
