AAVE Plummets to $274 as Whales Dump Millions—Time to Buy the Dip?

DeFi's lending heavyweight takes a hit as institutional players exit stage left.

Whale Exodus Triggers AAVE Sell-Off

The token nosedived 18% in 24 hours after three undisclosed wallets moved $47M worth of AAVE to exchanges—classic 'take profits and run' behavior. Liquidity pools saw instant pressure as asks piled up.

Market Reacts with Contagion Fears

Traders are watching ETH/BTC pairs for spillover, but so far it's isolated carnage. 'This is why you never marry your bags,' quipped one pseudonymous analyst on X—right before dropping a 'buy zone' prediction at $240.

Silver Lining for Degens?

Retail OI on derivatives platforms spiked 73% post-drop. Either fools are rushing in, or the smart money knows something the charts don't. Meanwhile, traditional finance bros are still trying to pronounce 'Aave.'

What’s Causing AAVE to Drop Today?

The primary reason for AAVE’s recent sell-off is the massive $1.7 billion Ethereum withdrawal by major holders, including Justin Sun, on July 24. These withdrawals have raised short-term liquidity concerns and shaken investor confidence.

Despite the selling pressure, Aave’s platform fundamentals remain strong. The protocol recently surpassed $50 billion in TVL, a major milestone that reflects continued trust from both institutional and retail users. Additionally, AAVE facilitated over $7.5 billion in flash loans in 2025, showing its ongoing dominance in the decentralized finance space.

Still, the market appears torn between Aave’s strong fundamentals and the immediate bearish sentiment caused by the whale exits. While Aave surged nearly 95% in the past month due to declining exchange supply and earlier whale accumulation, the tone has now shifted with the recent withdrawals.

AAVE Technical Analysis: Bearish Momentum Building

Despite its strong growth, technical indicators suggest that AAVE may be in for more short-term pain:

• RSI (Relative Strength Index): Currently sits at 40.59, still in neutral territory but trending downward. This hints at growing bearish pressure.

• MACD: The MACD histogram shows a bearish divergence at -5.49, signaling increasing selling momentum.

• Moving Averages: AAVE is now trading below its 7-day ($289.47) and 20-day ($305.51) simple moving averages, reinforcing a short-term bearish trend. However, it remains above the 200-day SMA ($236.45), which still suggests longer-term support.

One encouraging sign: AAVE is trading NEAR the lower Bollinger Band ($273.81) with a %B value of 0.0171. This often signals an oversold condition, where prices may be due for a short-term bounce if buying interest reappears.

The Stochastic Oscillator also shows deeply oversold conditions, with %K at 4.23 and %D at 11.61. While this usually suggests a bounce is possible, confirmation is needed.

Key Support and Resistance Levels to Watch

AAVE is currently holding just above critical support at $272.10. If this level fails, it could lead to a fast drop to the next psychological support at $250. Below that, a strong support zone exists around $213.00, which acted as a bottom earlier this year.

On the upside, the first target is reclaiming $289.47, the 7-day SMA. A sustained MOVE above that level could open the path toward $305.51 (20-day SMA), and eventually $337.98, a strong resistance level that represents a 23% gain from current prices.

The Average True Range (ATR) is $18.32, indicating high volatility. This suggests daily price swings of 6–7% are likely in the short term.

Should You Buy AAVE at $274?

The current drop into oversold territory may present a short-term buying opportunity. If AAVE holds above $272 and bounces, there could be a rally back to the $289–$305 zone. Tight stop-loss orders below $265 can help manage risk.

It’s safer to wait for confirmation, such as a clear move back above the 7-day or 20-day SMA with strong volume. Given the uncertainty caused by whale withdrawals, cautious positioning is advised.

This dip may be seen as a long-term accumulation zone, especially for those confident in Aave’s continued leadership in the DeFi space. AAVE remains one of the most-used DeFi protocols with consistent growth in revenue and usage.

However, position sizing and risk management are key. There is still downside risk to the $250–$260 range if broader crypto market sentiment weakens or if another wave of whale selling occurs.

Conclusion

AAVE is at a pivotal moment, trading near $274 after a sharp 5% decline driven by $1.7 billion in Ethereum outflows from the platform. Technical signals are flashing bearish warnings, but oversold conditions suggest a bounce could occur if bulls defend the $272 support.

The next 24 to 48 hours are crucial. A break below this level could lead to further losses toward $250, while a bounce may offer upside toward $289–$305. Traders and investors alike should watch closely and adjust their strategies accordingly.