Aave’s price took a sharp dive after hitting $101.57 on July 31. Over the next two days, the DeFi token plunged 11.2%, slipping back below the critical $100 mark. Selling pressure was visible not just in spot trading but also in derivatives, with Open Interest dropping 5% in the last 24 hours according to Coinalyze data.
Funding rates recently shifted from negative to positive, signaling a potential shift in trader sentiment, but the short-term outlook remains grim. The token has struggled all week to break above $100, repeatedly getting pushed back by sellers. This rejection at the psychological barrier hints at more downside ahead.
Technical Indicators Point to Deeper Losses
The daily chart paints a bearish picture. Aave breached its previous swing low of $85.05 back in May, setting a new low at $57.83. Fibonacci retracement levels confirm the resistance near $105.81 remains intact. Capital outflow indicators like the Chaikin Money Flow (CMF) sit below -0.05, showing strong selling pressure. Meanwhile, the Accumulation/Distribution line has been trending down for months.
Throughout July, AAVE has bounced between $88 and $100 but currently trades near the bottom of that range. Directional Movement Index (DMI) components, including -DI and ADX, remain above 20, underscoring a firm downtrend. Should the $88 support fail, the token could slide further toward $83 or even $72.
Adding to the bearish narrative, Aave’s founder Stani Kulechov announced plans to remove 50 low-usage reserve assets and wind down deployment on six blockchains, which could consolidate the project but might weigh on short-term sentiment.
This material is for informational purposes and does not constitute financial advice.
