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.
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.
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).
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.
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.
