Aave’s governance token, AAVE, experienced a notable decline on Thursday, dropping 8% to trade near $208. This marks a significant pullback from the token’s recent peak of $248 reached earlier in the week, representing an overall loss of more than 16% since Monday.
Despite ongoing advances in decentralized finance (DeFi) projects broadly, AAVE encountered sustained selling pressure. The token exhibited a pattern of lower highs and lower lows, signaling bearish momentum. This trend contrasted with the broader market, as many DeFi peers maintained more stable price action during the same period.
Trade volumes surged to approximately 40% above average seven-day levels, indicating that the price movement is reflective of active repositioning by investors rather than passive price drifting. Relative to the CoinDesk 5 Index (CD5), which registered a nearly 4% decline, AAVE’s underperformance underscores a more pronounced weakness within its specific trading dynamics.
Interestingly, this price correction took place even as Aave’s institutional-focused real-world asset (RWA) lending platform, Horizon, demonstrated robust growth. Since launching roughly two months ago, Horizon’s marketplace has expanded to exceed $450 million in total volume, showing solid adoption for tokenized real-world lending products.
Technical analysis presents cautionary signals for AAVE. The support level around $211 was decisively broken, while the token struggled to surpass resistance near $235 during prior attempts to rebound. Volume spikes at price points of $228, $219, and $213 have corresponded with intensified selling phases, reinforcing negative sentiment among traders.
The consolidation of lower highs and lower lows spans a price range of approximately $26.88, equivalent to an 11.4% decline, highlighting the established downtrend. After failing to recover above $212.70, AAVE appears poised for potential further declines unless new buying interest emerges to stabilize the token.
In summary, while Aave’s backend fundamentals—particularly the strong adoption of Horizon’s RWA lending arm—remain promising, the token is currently experiencing downward pressure amid a broader market retreat. Market participants should monitor critical support levels and volume trends closely for indications of sustained directional shifts.
Disclaimer: This article was produced with input from AI-assisted tools and reviewed by the editorial team to ensure accuracy and compliance with CoinDesk’s standards. For more information, refer to CoinDesk’s AI policy.
