AAVE falls 11% – Will $202 hold amid $35.5M whale dump?

Key Takeaways

What triggered AAVE’s recent price drop to $214? 

A surge in whale sell-offs totaling $35.5 million and sustained retail selling pressure drove the decline.

What must happen for AAVE to reverse its bearish trend? 

Bulls need to reclaim the Future Trend Channel level around $240 to regain momentum and target $258. 

Aave [AAVE] has experienced sharp downward pressure since reaching $264 four days ago, falling to a low of $210.

At the time of writing, AAVE was trading at $214, after facing an 11.57% drop in the past 24 hours and a 21.91% decline over the last seven days.

As the price continues to break down, investor sentiment has worsened, prompting panic selling, particularly among large holders, or whales.

AAVE whales dump $35.5 million worth of tokens

Notably, following the market’s brief attempt to recover from the recent price crash, AAVE saw a sharp increase in whale activity.

According to CryptoQuant, the Spot Average Order Size showed large whale orders for seven consecutive days, an indicator of sustained participation from major holders in the spot market.

In fact, on-chain monitors have reported some of these whale orders. According to Lookonchain, a whale dumped 88,227 AAVE tokens worth $19.89 million. 

Another long-term whale, reported by EmberCN, withdrew 70,000 AAVE and sold them for $15.62 million.

In total, these two whales offloaded 158,227 tokens worth approximately $35.51 million. Often, such a vigorous selling activity during a downtrend signals a lack of market conviction, a clear bearish signal. 

Historically, increased selling pressure from whales has resulted in intense downward pressure, a precursor to lower prices. 

Retail traders join the sell-off

Unsurprisingly, with whales selling, small-scale investors have joined the exit. According to Coinalyze, AAVE has recorded a negative spot delta for six consecutive days. 

On the 17th of October, AAVE saw 48k in Sell Volume compared to 46k in Buy Volume. As a result, the altcoin saw a negative delta of -1.34k, a clear sign of aggressive spot selling. 

Furthermore, exchange activity further echoed the trend. According to CryptoQuant, the altcoin has recorded a positive Exchange Netflow for three consecutive days. 

At press time, Exchange Netflow was 30k AAVE, indicating higher exchange inflows. Historically, higher exchange flows have preceded lower prices, as supply becomes available for immediate sale.

More losses looming?

According to AMBCrypto, AAVE has experienced a sustained decline driven by whale and retail selling pressure.

Therefore, AAVE has dropped below both short-term and long-term Moving Averages, indicating downside momentum and weak market structure.

Thus, both short-term traders and long-term traders have lost confidence and momentum, marking a corrective phase. Such a market structure signals trend continuation potential.

If this trend continues, AAVE will drop to the lower boundary of the Future Trend Channel at $209, with $202 as key support.

For a trend reversal, however, bulls must step up and reclaim the Future Price based on the Future Trend Channel around $244. This will strengthen the altcoin to target the Short-term EMA (EMA20) at $258.