The AAVE cryptocurrency has recently drawn significant attention from both whales and analysts, as key technical and on-chain signals point toward a potential downturn. While large investors continue to accumulate, warning signs are emerging that could foreshadow a sharp correction. With momentum stalling at a critical resistance level and a prominent technical pattern flashing red, market participants are questioning whether a 27% drop could be on the horizon.
Whale Accumulation vs. Technical Resistance
In recent weeks, AAVE has seen a surge in whale activity. On-chain analytics platform LookonChain revealed that major investors have been actively purchasing AAVE tokens, with one whale alone acquiring over $10.4 million worth within a single day. This accumulation began around August 20 and has continued steadily, indicating strong institutional or high-net-worth interest in the asset.
Such buying pressure typically signals confidence in future price appreciation. Whale accumulation often precedes bullish breakouts, as large holders tend to absorb supply before driving momentum upward. However, despite this bullish on-chain behavior, AAVE’s price action tells a different story.
The token has repeatedly failed to break above the $140 resistance zone—the same level that marked its local high in March 2025. This repeated rejection suggests that selling pressure is mounting at higher price levels, possibly from profit-taking or resistance from long-term holders.
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TD Sequential Sell Signal: A Warning Sign
One of the most notable alerts came from crypto analyst Ali Martinez, who highlighted a bearish TD Sequential sell signal on AAVE’s daily chart. The TD Sequential indicator is a popular technical analysis tool used to identify potential trend exhaustion and reversal points. When it triggers a sell setup, it often precedes significant downward corrections.
Historically, similar signals on AAVE have coincided with an average price drop of 27%. If this pattern holds true, AAVE could fall toward the $100–$110 range in the coming weeks. Based on current levels near $140, such a move would mark a substantial retracement.
While the daily chart still shows a strong bullish structure—supported by rising volume and a new high in the On-Balance Volume (OBV) indicator—the failure to surpass $140 remains concerning. The OBV confirms that buying volume has been robust, but without a breakout, this strength may be absorbed by overhead supply.
Fibonacci extension analysis further supports the significance of the $140–$142.58 zone. This level represents the 100% extension of AAVE’s rally from July, reinforcing its role as a psychological and technical barrier.
Mixed On-Chain Metrics: Bullish Circulation vs. Profit-Taking Risks
On-chain data presents a nuanced picture of AAVE’s current market health. One key metric, the 30-day MVRV (Market Value to Realized Value) ratio, has reached its highest level since early March. This indicates that short-term holders are sitting on substantial unrealized profits.
When MVRV rises significantly, it often precedes periods of selling pressure, as traders lock in gains. Combined with the stalled price momentum, this suggests that profit-taking could accelerate if bullish momentum fails to resume.
However, not all on-chain signals are bearish. The mean dollar-invested age—a metric that reflects how recently coins were purchased—is declining. A falling dollar-invested age typically indicates increased token turnover and fresh capital entering the market, which is generally bullish.
This dynamic suggests that while some holders may be preparing to exit, new investors are stepping in to buy the dip. The result could be a healthy correction rather than a prolonged bearish trend.
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What’s the Likely Path Forward?
Given the conflicting signals—strong whale accumulation, bearish technical patterns, and mixed on-chain fundamentals—the most probable scenario appears to be a retracement followed by consolidation.
A drop toward the $105–$115 range aligns with both historical TD Sequential outcomes and key support levels derived from prior price action. This zone overlaps with previous resistance-turned-support and offers a logical area for buyers to re-enter.
If AAVE holds above $100 and stabilizes, the long-term bullish thesis could remain intact. The combination of active whale buying and increasing token circulation suggests underlying demand is still strong. However, failure to defend $100 could open the door to deeper losses.
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Frequently Asked Questions (FAQ)
Q: What is a TD Sequential sell signal?
A: TD Sequential is a technical analysis indicator that identifies potential trend exhaustion. A sell signal suggests that an uptrend may be ending and a reversal or correction could follow. It has historically predicted average drops of 27% for AAVE.
Q: Why are whales buying AAVE if the price might drop?
A: Whales often accumulate before anticipated rallies. They may be positioning for long-term growth despite short-term volatility. Their buying can also create support at lower levels during corrections.
Q: What does MVRV indicate for AAVE?
A: The 30-day MVRV ratio shows that short-term holders are in profit. High MVRV values can signal increased selling pressure as traders take profits, especially when price momentum slows.
Q: Is AAVE still bullish despite the sell signal?
A: While short-term indicators suggest a correction, long-term fundamentals remain positive due to whale accumulation and declining dollar-invested age. A pullback could present a buying opportunity.
Q: What price level should investors watch for support?
A: Key support lies between $105 and $115. A break below $100 would be bearish, while holding above this level could set up a renewed rally toward $140 or higher.
Q: How reliable is on-chain data for predicting price movements?
A: On-chain metrics provide valuable insights into investor behavior and capital flows. When combined with technical analysis, they enhance decision-making—but should not be used in isolation.
Final Outlook
AAVE stands at a critical juncture. Despite strong whale accumulation and positive on-chain developments like increased circulation, technical indicators are flashing caution. The TD Sequential sell signal, combined with rejection at $140 and elevated short-term profitability, increases the likelihood of a 27% correction toward $100–$115.
However, this pullback may not spell doom for the bullish outlook. If new capital continues to enter and support holds, AAVE could consolidate and resume its upward trajectory later in 2025. For traders and investors, monitoring both price action at key levels and real-time on-chain flows will be essential in navigating the next phase of AAVE’s market cycle.