AAVE bearish intensifies: reasons behind the combination of technical weak signals and large whale sell-offs

Aave(AAVE) tokens continue to undergo a correction phase following a decline of over 12% last week. Currently trading at $164.99, AAVE shows signs that, despite strong momentum at the beginning of the month, short-term bearishness is likely to persist. This is due to both technical indicators and on-chain data sending negative signals.

Technical Indicators Indicating AAVE’s Downward Pressure

Looking at the price trend, AAVE was resisted at the 50-day exponential moving average(EMA) of $193.61 on December 10 and then plummeted. It has fallen below the weekly support level of $160.51 on spot exchanges, signaling that further declines are imminent.

Analyzing technical momentum indicators, the bearish trend appears more pronounced. The RSI(Relative Strength Index) is at 36, below the neutral 50 level, and the MACD(Moving Average Convergence Divergence) has turned negative again after a brief bullish reversal last week. This indicates that an initial rebound attempt has failed.

If the current trend continues, the decline could extend to the November 21 low of $147.13. Conversely, if a rebound scenario occurs, $179.27 is expected to be the first resistance level.

On-Chain Signals: Whale Activity Changes

According to the latest data from Lookonchain, whale wallets are accelerating their AAVE sell-offs. One whale was detected selling approximately 230,350 AAVE(worth about $38 million) on Monday.

More notably, the Santiment network realized profit and loss(NPL) indicator suggests that Aave holders’ profit-taking activity has reached its highest level since late November. This indicates that average holders are realizing meaningful gains and exiting. Both institutional and retail investors are increasing their selling pressure.

Future Scenarios for AAVE

Currently, AAVE is valued at a market cap of $2.50 billion as a liquidity asset management protocol. It has gained +3.95% in the past 24 hours but has not escaped the medium-term correction phase.

With both technical bearishness and large whale sell-offs ongoing, there is a risk of the $160.51 support level breaking in the short term. However, it is important to remember that extreme bearishness could lead to an oversold condition, potentially resulting in a rebound.