AAVE Breaks Structure After Sharp Sell-Off — Can Buyers Defend This Zone?

AAVE price saw a sharp shift in intraday structure after price slid from the $175–176 zone toward the mid-$150s, marking a near 10% drop within a few hours. The move unfolded quickly. With volume expanding by more than 220%, which is a classic sign of aggressive supply hitting the market rather than slow distribution.

For traders, the key question is no longer what triggered the drop, but what comes next. With AAVE now trading below its recent value area, attention turns to whether buyers can defend current levels or if the market is setting up for further downside continuation.

What Happened: Whale Activity Drives the Move

Shortly after AAVE broke below its intraday support, on-chain data revealed that a large holder had begun offloading a significant position. The timing of the transactions aligned closely with the surge in sell volume and the rapid downside move, indicating that concentrated supply—rather than broad market weakness—was the primary catalyst behind the decline.

The data shared by Lookonchain suggests the whale dumped over 230K AAVE in the past few hours. Moreover, the whale sold it at a loss, probably influenced by the negative retail sentiment across the market. This caused a significant drop of nearly 10% in the Aave price, which slashed close to $155 but later recovered to $160. The speed of the move indicates this to be intentional risk reduction, but not rotation or an accidental slippage. 

What’s Next for the Aave Price Rally? 

Aave (AAVE) came under sharp pressure after the price slipped from the $175–176 region to near $160, marking a nearly 10% intraday decline. The move unfolded quickly, breaking below the recent value area and shifting short-term momentum decisively lower. Volume expanded during the sell-off, signalling aggressive supply rather than routine profit-taking. With AAVE now testing a key higher-timeframe trendline, traders are watching closely to see whether this zone holds or gives way to deeper downside.

On the weekly chart, AAVE is pulling back toward its ascending trendline support, a structure that has held multiple times since mid-2023. Price is currently hovering around $160–162, a critical decision zone. A weekly close below this trendline would expose downside toward the $140–130 support band, while a strong bounce could trigger mean reversion toward $180–200. Momentum indicators are weakening, and OBV has rolled over, suggesting buyers must step in decisively to prevent further structural damage.

The Bottom Line: Will AAVE Price Recover the Loss Incurred?

The recent drop has clearly disrupted AAVE’s short-term momentum, but it has not yet invalidated the broader structure. Price is now sitting at a critical higher-timeframe support zone, where the market must decide whether this move was a temporary supply shock or the start of a deeper correction.

For traders, the answer lies in reaction, not prediction. A sustained defense of current levels followed by a reclaim of the prior value area would signal that the market has absorbed the sell pressure and is setting up for a gradual recovery. Failure to do so would imply that the loss needs more time to digest, with downside risk still unresolved. Patience and confirmation remain key.