AAVE Traders: Key Levels to Watch to Avert Further Decline!

Despite a surge in active addresses, AAVE’s total value locked (TVL) experienced a decline
In contrast, technical analysis indicates a possible upward movement for AAVE

In the last 24 hours, AAVE’s market has seen a sharp sell-off of 11.27%. This recent slump may continue, given other market trends suggesting a prolonged downward trajectory on the charts.

Nevertheless, technical analysis highlights a potential trend reversal, positioning AAVE at a pivotal point. Therefore, AMBCrypto reviewed AAVE’s likely future movements against these conflicting signals.

Decline in AAVE Linked to Investor Withdrawals

According to DeFiLlama, AAVE has seen a significant drop in its Total Value Locked (TVL), indicating that investors are pulling their assets from the protocol.

As of the latest data, AAVE’s TVL has fallen to $11.941 billion. If current trends continue, AAVE may encounter additional decreases.

TVL represents the total value of assets held in decentralized finance (DeFi) platforms, often reflecting overall market engagement and capital investment.

Source: DefilLama

This trend of withdrawing investors is reflected in the surge of active addresses, which increased by 6.85% to over 1,020, indicating heightened activity primarily due to sell-offs as AAVE’s price continued to drop.

Significant Losses for AAVE Long Position Traders

Traders who anticipated a sustained increase in AAVE have encountered significant losses as market conditions shifted against them.

According to Coinglass, $1.91 million has been lost as traders wagered on AAVE’s upward movement on the charts.

Furthermore, there appears to be a disparity between long and short positions, with long positions significantly skewed towards losses.

Source: Coinglass

This negative sentiment was further mirrored in the Open Interest, which saw a dramatic decline of 20.23%, indicating a potential continuation of selling by AAVE holders.

Technical Analysis Indicating Potential Rebound for AAVE

Technical charts suggest that AAVE may be on the verge of a rebound, particularly as it has arrived at critical confluences that might elevate its price further.

AAVE has reached an essential point on the chart where a horizontal resistance line intersects with a diagonal resistance line. AAVE’s response has shown positive movements, indicating a potential upswing. If this resistance level is maintained, AAVE could rise to $180.74.