The price of AAVE has been under constant pressure. The token's value has dropped nearly 5% in the last 24 hours and over 18% in the last seven days. The weakness has been linked to ongoing DAO governance disputes and new selling fears.
Overall, this seems to be the distribution phase. The balances in the exchanges are increasing, and the market sentiment has cooled down. However, there is conflicting development beneath the surface. While supply is moving to the exchanges, large holders have quietly bought more, viewing the dip more as a buying opportunity than a starting point. Now the question is: what bullish structure are the big players, or 'whales,' preparing for as the rest of the market focuses on governance risks?
Exchange supply is increasing as governance pressure continues.
The selling wave of AAVE did not appear out of nowhere. Governance-related tensions have been rising for weeks, creating uncertainty around revenue streams and DAO governance. That uncertainty is clearly visible in blockchain data supply.
After December 16 (the day of the Poison Pill initiative), the number of AAVE tokens on exchanges has increased from about 1.22 million to 1.42 million. Thus, a growth of nearly 200,000 AAVE, or about 16%, in just over a week.
Rising exchange balances usually indicate potential selling pressure, and the price has dropped nearly 18% in the same timeframe, reinforcing concerns about potential selling.
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This change is particularly interesting as it reverses the previous development from December 16. When the uncertainty regarding AAVE's regulation eased in mid-December, exchange balances sharply decreased as confidence returned. Now, with governance-related issues persisting, supply has returned to exchanges, adding caution in the short term.
This setup appears bearish when viewed in isolation. The increase in exchange supply is just one part of the market.
Whales are buying the dip as selling fears peak.
Exchange balances have risen, but large holders have acted differently.
In the last 24 hours, AAVE whales' holdings increased by 12.63%, and their total amount is now 183,987 AAVE. This means about 20,600 fresh tokens, valued at approximately 3.1 million dollars at current prices.
At the same time, public figures' wallets, which include verified assets and tracked actors, increased their holdings by 13.55%. Their balance rose to 274,652 AAVE. The growth translates to about 32,700 tokens, or approximately 5 million dollars.
In total, these two groups increased their holdings by over 53,000 AAVE in just one day. At the current price, this corresponds to over 8 million dollars, which has been raised directly from weakness.
This divergence is significant. When exchange supply increases, but whales are buying, the situation often indicates a shift from short-term fear to long-term conviction. The actions of large holders seem to be based on structure, not headlines, and they do not react to governance disputes in the same manner as the market at large.
Next, it is worth examining the price development.
An upward AAVE price trigger is being prepared for by whales.
The price movement provides the missing connective factor.
AAVE has repeatedly defended the 147 dollar area, forming an inverted head-and-shoulders pattern's head. Such a pattern often indicates a potential trend reversal after a long decline, especially when it forms during a period of strong fear.
However, the structure remains compressed under the descending neckline, meaning that sellers still dominate the overall trend. The trigger is, however, clear. A clear rise above the 182 dollar level would shift the sentiment. If 193 dollars is surpassed, it would confirm the rise and enable targets of 207 dollars and 232 dollars. 248 dollars would be the target for a broader retracement.
The risk is also finely defined. If AAVE loses the 147 dollar level, the bullish structure breaks. This would likely lead to new selling pressure, targeting 127 dollars at that point. Currently, whales seem to believe that the support level will hold and the structure will resolve upward.
