AAVE Searches for New Demand Zone in Downtrend as Retail Traders Drive Market Drop

Despite being a top market mover in previous months, Aave [AAVE] has recently struggled to make notable gains. Over the past week, the token has lost 14.01%

Despite being a top market mover in recent months, Aave [AAVE] has encountered difficulties in making substantial gains. Over the past week, the token has dropped by 14.01%, continuing its downward trajectory with an additional loss of 11.89% in the last 24 hours.

This downturn is expected to continue, lagging behind other assets and anticipating further declines before potential recovery.

AAVE Searches for New Demand Zone in Downturn

The coin is currently experiencing a significant drop, which is expected to continue until it reaches a level with enough liquidity to either stabilize or shift the market direction.

At the time of writing, this potential demand zone is projected to be between $135.34 and $116.21, as marked on the chart.

If this level holds, AAVE may chart a path back to its previous high, potentially reaching the $200 mark. Further market momentum could support the asset’s movement toward even higher levels.

Retail Traders Drive AAVE Market Drop

The recent decline in AAVE’s market value has been largely attributed to retail traders actively selling the asset.

According to data from IntoTheBlock, the number of active addresses surged in the last 24 hours, reaching 1,220 at the time of analysis.

A sharp increase in active addresses, coupled with a prolonged market decline, suggests that market participants are more inclined to sell than to buy.

Meanwhile, large holders, or “whales,” have remained relatively neutral. The number of large transactions has decreased significantly, dropping from a high of 334 on November 12 to 126 at the time of writing.

This whale inactivity may change if AAVE reaches a price level that these larger investors consider favorable, potentially within a demand zone where buying activity could increase.

Traders Shift to Long-Term Holding

Further analysis indicates that the overall market sentiment for AAVE remains bullish, as spot traders are increasingly moving their holdings off exchanges for long-term storage.

Analysis of Aave’s [AAVE] price movements reveals a lagging trend behind other assets, anticipating further declines before potential recovery.

AAVE’s token is currently experiencing a significant downturn, which is expected to continue until it reaches a level with sufficient liquidity to either stabilize or shift the market direction.

At the time of writing, this potential demand zone is projected to be between $135.34 and $116.21, as marked on the chart.

If this level holds, AAVE may chart a path back to its previous highs, potentially reaching the $200 mark. Further market momentum could support the asset’s movement toward even higher levels.

The recent decline in AAVE’s market value has been largely driven by retail traders actively selling the asset.

Data from IntoTheBlock shows a surge in activity, with 1,220 active addresses at the time of analysis.

This trend, coupled with the prolonged market decline, suggests a higher inclination among market participants to sell than to buy.

In contrast, large holders, or “whales,” have remained relatively neutral, with the number of large transactions decreasing from a high of 334 on November 12 to 126 at the time of writing.

This whale inactivity may shift if AAVE reaches a price level that these larger investors find favorable, potentially within a demand zone where buying activity could increase.

Despite the market downturn, the overall sentiment for AAVE remains bullish, with spot traders moving their holdings off exchanges for long-term storage.

Data from IntoTheBlock shows that over the past 24 hours and 7 days, 22.09 thousand and 67.46 thousand AAVE, respectively, were withdrawn from exchanges.

This trend of removing AAVE from exchanges reduces the circulating supply available for immediate sale, which can support demand and indicate a broadly bullish outlook for the asset.