The AAVE price has been under pressure for a while. The token has dropped nearly 5% in the past 24 hours and more than 18% in the past seven days. This weakness is visible as there are ongoing tensions within the DAO governance and fears of a new wave of selling are increasing.
At first glance, this looks like distribution. Balances on exchanges are rising and sentiment has cooled. Yet something is not right behind the scenes. While the supply shifts towards the exchanges, large holders are quietly stepping in. They see the wave of selling as a buying opportunity, not as an exit. The question now is simple: For which bullish setup are whales positioning themselves while the market is primarily focused on the governance risk?
Exchange supply is rising while governance pressure persists.
The sell-off of Aave did not come out of nowhere. Governance tensions have been rising for weeks and are causing uncertainty about cash flows and the control of the DAO. This uncertainty is clearly visible in the on-chain data regarding supply.
Since December 16 (the day of the Poison Pill proposal), the number of AAVE tokens on exchanges has increased from about 1,220,000 tokens to around 1,420,000 tokens. This is an increase of nearly 200,000 AAVE, about 16%, in just over a week.
Rising exchange balances often indicate potential selling pressure, and the price movement confirms this concern. AAVE has dropped nearly 18% in the same period.
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This shift stands out as it is a reversal of what happened earlier this month (on December 16). When there were fewer concerns about Aave's regulation in mid-December, exchange supplies quickly dropped as confidence increased. Now that governance issues continue, the supply shifts back towards the exchanges. This again creates caution in the short term.
On its own, this situation looks bearish. But the exchange supply tells only one side of the story.
Whales buy the dip while fear of a sell-off peaks.
While the balance on exchanges has increased, large holders have moved in the opposite direction.
In the past 24 hours, Aave whales have increased their holdings by 12.63%, bringing their total to 183,987 AAVE. This means they have gathered about 20,600 new tokens, valued at around $3.1 million at the current price.
At the same time, public wallets – including verified funds and known entities – have increased their position by 13.55%, to 274,652 AAVE. This growth represents about 32,700 extra tokens, worth approximately $5 million.
Together, these two groups have added more than 53,000 AAVE in one day. At the current price, this is over $8 million directly bought during a weak market.
This divergence is important. When the supply on exchanges increases, but whales are buying, it often means that short-term fear is being offset by long-term confidence. Instead of reacting to governance rumors, the large holders seem to be focusing on the structure of the project, not the headlines.
That brings us to the chart.
The bullish AAVE price trigger that whales are reacting to?
The price movement reveals the missing piece of the puzzle.
AAVE has defended the $147 zone multiple times and thus forms the head of an emerging inverse head-and-shoulders pattern. This pattern usually indicates a potential trend reversal after a long downward period and often forms during increased fear.
The structure remains compressed under a declining neckline, which means that sellers still determine the broader trend. But the trigger is clear: a clear breakout above $182 can tilt the momentum. If $193 is broken, the breakout is confirmed and there is room for a price towards $207, then $232, with $248 as the larger recovery target.
The risk is also clearly defined. If AAVE drops below $147, the bullish structure breaks. This could create new selling pressure and push the price towards $127. For now, it seems that whales are betting that this support holds, and that the structure can break upwards.
