The price of Aave (AAVE) continues to be caught in a downtrend as it trades below the $162 mark on Monday, extending last week's correction of over 12%. On-chain data shows that selling pressure is clearly increasing, as many whale wallets intensify their token sell-off in the market. At the same time, AAVE's momentum indicators are increasingly weakening and leaning towards the negative zone, signaling that the correction may not yet be over and there is still a risk of deeper declines in the upcoming sessions.
Whales and holders are dumping AAVE, increasing selling pressure.
Data from Lookonchain released on Monday shows that a whale wallet has dumped up to 230,350 AAVE, equivalent to $37.8 million, significantly increasing the selling pressure on this token.
Meanwhile, the Network Realized Profit/Loss (NPL) index monitored by Santiment recorded Aave's profit-taking activity reaching its highest level since the end of November.
As shown in the chart below, the NPL index surged during the session on Monday, reflecting that investors, on average, are taking the opportunity to realize profits at high levels. This trend not only indicates widespread profit-taking sentiment but also contributes to further amplifying the selling pressure on AAVE in the short term.
Aave price forecast: bears are controlling momentum.
The price of Aave (AAVE) failed to surpass the 50-day EMA at $193.61 during the session on December 10, thus reversing sharply downwards by more than 18% as of Sunday. On Monday, selling pressure remained dominant as AAVE continued to weaken and traded below the $161 level.
In a negative scenario, if AAVE maintains a downtrend and closes below the important weekly support zone at $160.51 on the daily timeframe, the correction momentum may continue to expand, pulling the price back to the bottom established on November 21 around $147.13.
Technical indicators are reinforcing a bearish outlook. The RSI is currently at 36, significantly lower than the neutral threshold of 50, reflecting an increasing downward momentum. Meanwhile, the MACD has shown a bearish crossover since last week and continues to maintain this signal, indicating that the negative trend has not yet ended.
However, in the event that AAVE experiences a rebound, the price may extend its increase to retest the daily resistance zone around $179.27.