AAVE Crypto Volume Tumbles by 3X as Price Tanks Below Key Level

Key Insights

• AAVE crypto volume declined by almost 3x in the past two days, while its fees generated dropped by about 5x.
• Liquidity on AAVE crypto continued to grow, even during periods of uncertainty. It’s also among the top projects with the most whale inflows.
• AAVE price made lower highs and lows, as the Dynamic VWAP showed. Despite the price trading above the VWAP on the hourly chart, it’s below it on the 4-hour chart, indicating existing bearish strength.

The lending sector led by Aave Protocol (AAVE) is doing as badly as the broader market. The network activity and price action showed clear evidence. However, there were glimpses of hope following whale inflows and liquidity growth.

From a technical perspective, AAVE price is sinking below key levels day by day. Last week’s rebound reached 20%, though it was quickly erased by bears. Hence, a detailed analysis is offered to offer insights on where the AAVE crypto price could head.

AAVE Crypto Activity as Volume and Fees Slip

First, the volume of AAVE traded went down by almost 3x over the last two days. Also, the fees declined by about 5x, giving a synchronized sentiment for different fronts.

Specifically, the volume dropped from a high of about $900 million to less than $300 million. At the same time, daily fees dropped from more than $8 million to less than $2 million.

This sharp drop suggested that fewer people were participating in the market, leading to less money available. So, lower fees might make protocol stakers less likely to do so. The result could slow the ecosystem’s growth.

AAVE crypto volume vs. Fees data | Source: DefiLlama

Also, the fact that volume and fees were declining showed that high-value transactions declined faster than general retail activity.

Hence, the network was still working. However, the data indicated consolidation or waning interest. That way, traders needed to be careful to avoid slippage and volatility.

Liquidity and Whale Accumulation Growing

On the liquidity and whale inflow side, things were positive for AAVE crypto. Stablecoin liquidity on AAVE has been steadily rising, even amid uncertainty. As of press time, stablecoin total supply stood at $500 million.

This meant trading the token was not a problem, as this liquidity would provide a floor for deposits and withdrawals. Also, more money was available for lending and borrowing.

For whales, AAVE had the most whale inflows in the last 24 hours, with $588.3 million. This inflow was more than that of PEPE at $584.5 million and Official Trump (TRUMP) at $265 million. Other tier-one coins on this list were Pudgy Penguins (PENGU) and Sei Network (SEI).

Top 10 projects by whale inflows | Source: Dami DeFi/X

This signaled big players were very interested, but it’s important to look at these kinds of changes in the context of the overall market. These observations, however, only give us a picture of how things are now. But can this help reverse price struggles, or will AAVE continue falling?

AAVE Price Prediction: Will It Continue Falling Freely?

On the charts, the Dynamic VWAP showed that AAVE price was making lower highs and lower lows. Even though the price was above VWAP on the hourly chart, it was still below VWAP on the 4-hour chart. This showed that bearish control was still in place.

When writing, AAVE price was trading near $114, which was well below the key level of $120. This indicated that the trend was weak. The anchored VWAP, on the other hand, declined, further affirming the strong selling pressure.

The price was also just above VWAP on the hourly chart, between $113 and $115. This suggested that things were stabilizing in the short term.

AAVE crypto price chart | Source: TradingView

But the ADX on the bigger timeframes stayed high at 49, with the -DI leading the +DI. That was some strong bearish momentum.

On the other hand, the hourly ADX cooled down to around 25, which suggested that the market was consolidating. So, bulls needed to get back above $120 and VWAP needed to change their minds. If they don’t, the price could drop to $105 or lower.

The post AAVE Crypto Volume Tumbles by 3X as Price Tanks Below Key Level appeared first on The Market Periodical.