The recent Aave governance drama presented smart money with a perfect opportunity to scale exposure to the DeFi platform at a discounted rate. AAVE dumped 20% to lows of $143 and wiped out over $500 million from the altcoin’s market.
However, during the chaos, the Top 100 Addresses increased their holdings to 12.92 million AAVE, adding approximately 8% of the total supply.
Now the Top 100 Addresses control 80% of the overall AAVE supply.
Source: Nansen/Jordi
Whales or large holders also increased by 66% over the same period between early and late December. The whale wallets with holdings of over $1 million surged from 120k to 200k, underscoring massive whale demand as other retail investors backed out during the governance drama.
Source: Nansen/Jordi
But most importantly, the selling pressure across exchanges also declined substantially.
AAVE selling pressure declines
Santiment data showed that during the peak of the Aave Labs-DAO drama and the Christmas week voting period, AAVE tokens on exchanges surged from 1.22 million to 1.43 million coins.
This resulted in a surge in selling pressure, coinciding with the sharp decline from $182 to $143.
However, the selling pressure eased to 1.31 million AAVE at the time of writing as tracked by Supply on Exchanges (red).
Source: Santiment
Worth pointing out that the selling pressure also eased after Aave Labs and Aave founder Stani Kulechov promised to share non-protocol revenue with tokenholders.
Although the hostilities were de-escalated, the drama is not yet over unless the different factions finalize negotiations in a binding and enforceable agreement.
That said, the derivatives market demand remained flat at around $130-$150 million in Open Interest, the same level seen during the muted market in Q4 2025.
AAVE could rally 30% if…
On the price charts, AAVE bulls have attempted to reclaim the 50-day Moving Average ($174) for the second time since December. Although they failed again, a successful reclaim would reinforce a bullish market structure shift and potentially lead to a sustainable recovery.
As such, consolidation between $160 and $174 could allow bulls to regroup and attempt another push at the crucial level. Should they clear the hurdle, a potential 30% upside to $210-$220 could be likely.
However, losing the $160 support would invalidate the bullish outlook and likely drag the altcoin back down to $140 again.
Source: AAVE/USDT, TradingView
Final Thoughts
- AAVE has recorded massive whale interest and aggressive bidding from smart money.
- Overall selling pressure also tapered and could allow a potential recovery, but only if $160 support holds.
Source: https://ambcrypto.com/aave-whales-scoop-8-of-supply-amid-sell-off-a-move-to-210-possible-if/
