AAVE Whale Activity Raises Red Flags as Price Hovers Near the Lower Bollinger Band

One of the most dominant DeFi lending protocols, AAVE, has seen a sharp increase in whale activity

Key Notes

AAVE, one of the most dominant DeFi lending protocols, has seen a sharp increase in whale activity, raising concerns about a potential price dump.

While the price is currently up, the large-scale movements of AAVE tokens by key players suggest that traders should stay cautious.

Whale Activity Raises Red Flags

Blockchain analysis platform Lookonchain reported significant sell-offs from two whale wallets. Address 0xd282 deposited 30,001 AAVE ($4.98M) to FalconX and still holds 37,425 AAVE ($6.33M), with a total profit of $11.8M.

Whales are selling $AAVE!

0xd282 deposited 30,000+ $AAVE to #FalconX and still holds 37,425 $AAVE, with a total profit of $11.8M.

0x1AdC moved 11,018 $AAVE to #OKX at a loss of $293K.

Similarly, 0x1AdC moved 11,018 AAVE ($1.86M) to OKX, taking a $293K loss on the trade. These transactions signal that high-volume traders are either taking profits or exiting positions, which could put downward pressure on AAVE’s price.

However, Kiraverse, an Unreal Engine 5-based multiplayer game, later disputed the narrative, claiming that at least one of these transactions was part of a strategic move.

This was my trade and I reacquired it through different wallets

Verify before trusting lookonchain

— KIRAVERSE (@Kiraversegame) April 1, 2025

The game claimed that the tokens were “reacquired” through different wallets. If true, this eases some of the bearish outlook on the 40th-largest digital asset.

AAVE Price Analysis

At press time, AAVE is trading at $166.29, reflecting a 7.18% increase in the past 24 hours, shows the data from CoinMarketCap. The resistance at the 20-day exponential moving average (EMA) at $17784 still holds strong.

Source: TradingView

Meanwhile, the Relative Strength Index (RSI) reads 41.28, meaning it is still in the neutral-to-oversold range.

There could be some room for a rebound, but a break below 40 could indicate more downside pressure for AAVE.

The AAVE price action is currently hovering near the lower Bollinger Band at $157.72, which is a critical support level. If this level holds, a bounce toward the mid-band ($174.81) or upper band ($191.90) is possible.

However, if the price falls below $159, further downside toward $128 could follow, as per analyst Reed Carson’s assessment.

If buyers step in there we could see a solid bounce making it a potential long opportunity

— Reed Carson (@reed_carss) March 31, 2025

Does AAVE Have Long-Term Potential?

Irrespective of the short-term bearish trend, AIEVE dominates the DeFi space, controlling about 65% of the market share in the digital asset lending space, according to blockchain analytics platform Token Terminal.

crypto protocols have no moats

but @aave has ~65% market share in the lending sector

— Token Terminal 📊 (@tokenterminal) March 31, 2025

DefiLlama reports that the total value locked (TVL) on AAVE has reached new all-time highs every month since December in terms of ETH, highlighting growing adoption.

TVL on @aave in terms of ETH has hit a new ATH every month since December.

— DefiLlama.com (@DefiLlama) March 24, 2025

This fundamental strength suggests that while AAVE might see some price fluctuations, its long-term prospects remain strong.

If the price tests the $128 level and buyers step in, it could present a compelling long opportunity for traders.