aave

Recent governance-related controversy surrounding Aave (AAVE) has unintentionally created what many market observers describe as a rare accumulation window for smart money. A sharp 20% price correction pushed AAVE down to a local low of $143, wiping out more than $500 million in market capitalization within a short period.
While broader market sentiment turned defensive, large holders quietly increased their exposure. Data shows that the top 100 AAVE-holding wallets have raised their combined holdings to 12.92 million tokens, representing roughly 8% of the circulating supply. Collectively, large holders now control around 80% of total AAVE supply, highlighting a high level of capital concentration.
Adding to this trend, the number of “whale” wallets—defined as addresses holding portfolios worth over $1 million—rose by 66% throughout December, increasing from approximately 120,000 to 200,000 wallets. This suggests strong accumulation by larger investors, even as retail participants reduced exposure amid governance uncertainty.
More importantly, selling pressure on centralized exchanges has begun to ease, hinting at early signs of market stabilization.
AAVE Selling Pressure Shows Signs of Cooling
According to data from Santiment, the peak of the governance dispute between Aave Labs and the DAO—which coincided with voting activity during the Christmas period—saw a sharp rise in exchange inflows. The amount of AAVE held on exchanges jumped from 1.22 million to 1.43 million tokens.
This spike in exchange supply quickly translated into heightened sell pressure, aligning with AAVE’s price drop from $182 to $143.
At the time of writing, however, exchange-held AAVE has declined to approximately 1.31 million tokens, based on Santiment’s Supply on Exchanges metric. The reduction suggests that panic-driven selling has subsided, at least temporarily.
Notably, this shift followed a public commitment from Aave Labs and founder Stani Kulechov to explore sharing off-protocol revenue with AAVE holders, a move widely viewed as an attempt to ease tensions within the community.
That said, the governance issue cannot yet be considered fully resolved unless a binding and legally enforceable agreement is reached. Meanwhile, the derivatives market continues to reflect caution, with open interest fluctuating between $130 million and $150 million, levels consistent with the subdued conditions seen in Q4 2025.
Under What Conditions Could AAVE Rally 30%?
From a technical perspective, AAVE bulls have made two unsuccessful attempts since December to reclaim the 50-day moving average (MA) near $174. Despite these failures, this level remains a critical technical threshold for restoring a bullish market structure and supporting a more sustainable recovery.
Currently, the $160–$174 range is acting as a key accumulation zone, where buyers may gradually rebuild momentum. A decisive breakout above the 50-day MA could open the door for a potential 30% upside move, targeting the $210–$220 region.
On the downside, losing the $160 support level would invalidate the bullish setup and increase the likelihood of a retest of the $140 zone, where previous demand emerged.
Final Thoughts
Despite short-term uncertainty driven by governance concerns, whale accumulation, easing exchange sell pressure, and defined technical levels suggest that AAVE may be approaching a critical inflection point. Price behavior around key resistance and support zones will likely determine whether a recovery scenario can materialize.
This article is for informational purposes only and does not constitute financial or investment advice. Readers should conduct their own research before making any investment decisions. The author is not responsible for any financial outcomes.
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