AAVE Plummets to $86 as Exchange Reserves Hit Highest Level Since April 2025

On April 7th, AAVE’s price dropped sharply from over $92 to $86 in just a few hours – its biggest single-day move in over a week, with the highest trading volume since the price decline on April 2nd. A key indicator, the 50-day Simple Moving Average (SMA) at $93.19, had been trending downwards since early April, suggesting a weakening market before the drop actually happened. This price decrease ultimately confirmed the warning signs from the SMA.

The Relative Strength Index (RSI) dropped to 26.18, indicating the asset is significantly oversold and below its signal line at 28.42. This level hasn’t been seen since April 2nd, when the price saw a short-lived bounce to around $98 before resuming its downward trend. That earlier bounce didn’t alter the overall negative trend, but it did allow some investors to sell their holdings at a slightly better price – a pattern confirmed by recent trading data.

Who Is Sending AAVE to Exchanges and Why

As a crypto investor, I’ve been keeping a close eye on AAVE, and the data from CryptoQuant shows a notable shift recently. Since early February, I’ve noticed about 160,000 AAVE tokens moved onto exchanges over six weeks – that’s an increase from 2.07 million to 2.23 million. Binance seems to be the biggest recipient of this, taking in around 60,000 AAVE, bringing their total holdings up from 1.57 million to 1.63 million. It’s something I’m definitely watching closely as it could indicate changing investor sentiment.

Where AAVE tokens are moving is now more important than how many are being traded. For almost a year, starting in April 2025, people were taking their AAVE off of exchanges, which decreased the amount available for sale. However, that trend has recently changed. The amount of AAVE held in exchanges has increased, surpassing its 90-day average – ending the longest period of decreasing exchange holdings AAVE has experienced in quite some time.

The recent market shift is driven by two kinds of sellers. Some are giving up and selling their holdings as prices drop and the outlook worsens. Others are taking profits earned earlier, anticipating further gains will be harder to come by. Regardless of their reasons, both actions result in more assets being offered on exchanges. This increased supply on exchanges means there’s more available for sale.

The Setup From Here

Okay, so looking at AAVE, the RSI is really low at 26.18, which usually means we could see a price bounce soon. Historically, when it’s been this oversold, there’s been at least a temporary recovery. However, there’s a big ‘but’. I’m seeing a huge amount of AAVE – 2.23 million – sitting on exchanges, more than I’ve seen in a long time, since April 2025. That tells me there are a lot of sellers ready to jump in above the current price, which is likely to cap any potential upside. So, while a bounce is possible, it probably won’t go very far.

AAVE is currently facing a key challenge: while it’s become very undervalued and could attract buyers, there’s a large amount of AAVE held on exchanges that could be sold, potentially limiting any price increase. Until broader market conditions improve enough to handle this available supply, or the amount of AAVE on exchanges starts to decrease, AAVE’s price gains will likely be hampered – something a simple chart analysis wouldn’t reveal.

This article is for informational purposes only and shouldn’t be considered financial, investment, or trading advice. Coindoo.com doesn’t support or suggest any particular investment or cryptocurrency. Before making any investment choices, please do your own research and talk to a qualified financial advisor.

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2026-04-07 20:44