Aave slides nearly 10% after $37.6M whale sell-off, causing volatility, but attracting buyers 

Aave, the decentralized finance (DeFi) token AAVE, has witnessed a negative sentiment after a massive whale sell-off. This has shaken investor confidence, and prices took a tumble by 10%. 

Summary

• 230,350 AAVE tokens were sold by a whale, which is worth about $37.6M, and pushed the prices down to $162. 
• However, on-chain data indicate mixed sentiment; a few whales are still accumulating AAVE tokens. 
• The predictions show a resistance around $160-$165.

The Big Whale Sell-Off 

AAVE prices experienced a 10% downslide after the big whale sell-off. As per on-chain data, wallet 0xa923, which contained 230,350 AAVE, was sold. Its total worth was around $37.8 million. This has pushed the AAVE token to around $161.70. 

The AAVE token had been purchased at an average price of $223.4 from the end of last year to the beginning of this year. The tokens were converted into stETH and WBTC. As investor confidence decreased, selling pressure increased, reducing spot market liquidity. This liquidation has caused a total loss of $13.45 million USD.  Moreover, swapping AAVE tokens for blue-chip assets is a calculated redistribution of funds. 

Reasons behind the sudden sell-off 

There are rational causes for AAVE’s sudden price drop. One of the key reasons is Aave Labs’ partnership with CoW Swap, a DEX aggregator and a pioneer in intent-based trading. This has created some level of controversy, as integration directed swap-related fees away from the AAVE DAO treasury, which has raised concerns about revenue loss. The lack of transparency and discussion with the DAO regarding the revenue change has outraged token holders. Moreover, it has brought uncertainty within the community about the AAVE’s autonomy. 

Mixed Whale Behavior Still Holding the Prices 

There has been conflicting behavior among whales in the case of AAVE. As mentioned above, on December 22, Aave’s second-largest whale sold approximately 230,350 AAVE tokens within three hours. An estimated loss of 13.45 million has been calculated. 

A major whale address that previously liquidated $101 in October started reaccumulating from November. By Early December, the whale had used 14 million USDC to acquire 80,900 AAVE at an average price of $173. 

Aave also attained regulatory relief, as the SEC closed its multi-year inquiry in mid-December. In 2025, Aave’s annual revenue will grow by nearly $100 million. 

AAVE Prices Under Pressure 

Even when there is a mixed whale behaviour and some level of hope among investors, the AAVE price charts indicate pressure. The highs and lows are striding downwards, and it is expected to be stuck in a downslide. According to the chart, $160-$165 is a support level for AAVA prices. If prices fall sharply, then it could hit $145-$150. 

Aave experienced a brief surge in volume during the whale action. However, it subsided soon. AAVE’s relative strength index is low, which means a weak recovery and less chance for a trend shift. The prices won’t gain an upward momentum until the volume increases significantly. 

Conclusion 

Until the Aave founders provide some clarity regarding the fee allocation, there is a lower chance of AAVE token prices seeing any positive changes. However, the mixed whale activities offer hope for other investors, and if they can lead to a surge in volume, the chances of recovery are high.