Aave (AAVE) Price Prediction 2023: Will the Altcoin Recover After Whale Dump?

Over the past two days, Aave [AAVE] has declined from a high of $361 to $335. This decline arises as large holders have turned to profit-taking, trying to maximize the New Year's pump.

Over the past two days, Aave’s [AAVE] price has declined from a high of $361 to $335. This decline arises as large holders have turned to profit-taking, trying to maximize the New Year’s pump.

According to SpotOnChain, a whale has sold 19,001 Aave tokens (roughly $6.5 million) via Binance. Through this sale, this whale secured a whooping $4.93 million in profit.

This is the first sale since the whale started accumulating the altcoin in 2024. The whale withdrew 89,109 tokens (worth $7.36 million) in June. After the recent deposit, the whale still holds 70,108 AAVE tokens, which were valued at $23.65 million.

When whales begin to sell, it either shows their lack of confidence in the market or an attempt to maximize profit after a price pump. Such selling activity usually risks causing selling pressure, as investors might view the sale as a bearish sentiment, leading to weaker hands selling.

Impact on price charts?

As expected, increased selling activity has harmed AAVE’s price charts. In fact, at the time of writing, AAVE was trading at $339.

This marked a 1.71% decline on daily charts. Before the decline, the altcoin had been on an upward trajectory hiking by 19.34% monthly.

Although the altcoin has declined on its price charts as the whale started selling, it seems all market participants have turned bearish and anticipate prices to fall.

This is evidenced by a bearish crossover on the Relative Strength Index (RSI) that has emerged over the past 24 hours. This confirms that sellers have entered the market and are still dominating.

Additionally, the Chaikin Money Flow (CMF) is negative at -0.02, further confirming strong selling pressure.

Looking further, we can see this bearishness through the decline in on-chain outflow volume. According to IntoTheBlock, outflow volume has declined from 59.22k to 33.19k.

This shows that more investors are still keeping their AAVE tokens in exchanges.

This phenomenon is further evidenced by the rising netflows which have surged from -22.02k to 4.57k. This shows that more investors are transferring their tokens to exchanges than those accumulating. Such trends suggest investors are bearish and anticipate prices to decline.

Finally, AAVE’s NVT Ratio with transaction volume has spiked to extreme levels (323), which is associated with a potential market correction. This rise indicates that the network’s active users have declined relative to its market cap.

Historically, a high NVT ratio often precedes market corrections since there’s a disconnect between prices and market fundamentals.

In conclusion, while whale selling is associated with increased selling pressure, it’s not an isolated case as investor sentiment has turned negative, although only in the short term.

If these market conditions continue, AAVE could drop to $324. If buyers reenter the market, a reversal could see the altcoin reclaim $354.