Aave whales on a selloff spree: can the altcoin survive the dump?

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As a seasoned crypto investor with a portfolio that has weathered numerous market cycles, I must admit that watching Aave (AAVE) navigate through these turbulent waters is giving me a sense of déjà vu. The persistent decline over the past five days, despite the broader market showing some signs of recovery, is reminiscent of the classic seesaw ride in an amusement park – just when you think it’s time to relax and enjoy the view, it throws you for another loop.

As a researcher observing the crypto market, I’m navigating through rough seas with Aave. It seems that some of the ‘crypto-whales’ are liquidating their positions, possibly in response to the current market compression.

For the last five days, Aave (AAVE) has experienced a continuous drop, resulting in five straight red bars or ‘candles’ on its daily chart starting from October 31st.

Following a peak of approximately $158 in late October, the price of Aave started to decline, dropping roughly 14% over the subsequent days and currently hovering around $129. Although it has made a small upward move today, Aave is finding it difficult to regain bullish momentum due to the wider market turbulence.

In simpler terms, the overall market is showing signs of improvement due to election events in the U.S., and Aave’s slight 1.1% growth today mirrors this broader trend. Yet, if there’s no significant breakthrough above crucial resistance points, Aave could still be at risk for further drops.

A key reason behind Aave’s downturn could be significant sales by prominent market participants, as evidenced by large-scale transfers from whales to exchanges, according to Lookonchain data.

It appears that several whale entities are moving their AAVE tokens out of Aave and into other platforms such as MEXC, Binance, OKX, etc. Here’s a breakdown of recent transactions:

— Lookonchain (@lookonchain) November 5, 2024

As per information from Lookonchain, the wallet identified as 0x7634 transferred approximately $3.39 million in AAVE tokens towards the MEXC exchange. This action may suggest an impending sale of AAVE.

As a researcher, I’ve observed significant transactions in the last 24 hours. Specifically, there was a $1.04 million transfer to Binance, a $1.29 million deposit to OKX, and another $1.02 million transaction back to Binance – all pointing towards potential adjustments in whale holdings of Aave. These substantial moves suggest that these prominent investors may be offloading their Aave positions, which could exert downward pressure on the asset’s price.

Can AAVE survive the whale dump?

As an analyst, I’m noting that Aave has experienced a 0.66% increase over the past 24 hours and is currently valued at $129.65 per unit. However, over the last week, it has seen a decline of 15.74%, causing its market capitalization to dip to approximately $1.94 billion.

According to the Daily Momentum Indicator (DMI), the market trend appears to be bearish. The negative directional indicator (-DI) is quite high at 27.6, implying substantial selling force, whereas the positive directional indicator (+DI) remains relatively low at 13.8, suggesting minimal buying power.

On the other hand, the ADX stands at 19.8, suggesting that the current market trend isn’t particularly strong. This might mean a stretch of price stabilization ahead. With the ADX dipping below 20, buyers may use this moment to reduce the resistance and lessen the selling pressure.

The chart further shows pivot levels, with the current price sitting just above the support level at $126.2. If the price dips below this, Aave could face a further drop, potentially breaking below the $120 mark. 

For Aave’s sentiment to flip from bearish to bullish, it needs to make a substantial rise. This means it should surpass the crucial point of $147.12, which represents a 13.5% increase from its current price. However, even if this happens, there are more resistance levels to overcome at $160.04, $168.03, and $180.96.

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2024-11-05 13:03