Why did the price of AAVE fall?

Aave (AAVE) dropped 1.01% in the last 24 hours, underperforming the overall crypto market, which rose by 0.39%. This decline is linked to negative technical signals, security concerns, and a shift in investor focus away from altcoins.

1. Technical breakdown – Price hit resistance and fell below important moving averages.
2. Phishing attack risks – Fake Aave ads on Google caused security worries and short-term selling.
3. Altcoin rotation pressure – Bitcoin’s market share increased to 57.37%, pulling investment away from DeFi tokens like AAVE.

Deep Dive

1. Technical Rejection at Resistance (Bearish Impact)

Overview:
AAVE’s price fell below its 7-day and 30-day simple moving averages (SMAs), which are $307.18 and $312.54 respectively. This suggests weakening momentum. Other indicators like the MACD histogram (-1.03) and RSI (40.59 on a 7-day scale) also point to selling pressure. Resistance levels between $298 and $329, identified by Fibonacci retracement, further limited upward movement.

What this means:
The price rejection near $300 triggered stop-loss orders and automated selling by trading algorithms. Traders are now watching the next support zone between $272 and $280, which has been tested multiple times in August 2025. If this support fails, the price could drop further toward $255.

What to watch:
A daily closing price above $305 would challenge this bearish outlook and could signal a reversal.

2. Security Concerns From Phishing Campaign (Bearish Impact)

Overview:
On August 7, 2025, fake Aave ads appeared at the top of Google search results, leading users to scam websites like aaxe[.]co[.]com (Scam Sniffer). Although no major losses were reported, this raised short-term concerns about the security of the Aave protocol.

What this means:
Security scares often cause panic selling, especially for decentralized finance (DeFi) tokens that depend heavily on user trust. AAVE’s exchange reserves dropped to 2.9 million tokens—the lowest since 2021—indicating that holders moved their tokens to safer, offline wallets, which reduces liquidity.

3. Altcoin Weakness Amid Bitcoin Dominance (Mixed Impact)

Overview:
Bitcoin’s dominance in the crypto market rose to 57.37% (up 0.36% in 24 hours), while the Altcoin Season Index fell by 1.39%. AAVE’s 24-hour trading volume decreased by 4.44% to $336 million, reflecting a shift of investment into Bitcoin and Ethereum.

What this means:
DeFi tokens like AAVE often underperform during Bitcoin-led rallies. However, Ethereum’s recent strength—up 45% since August—could eventually benefit AAVE and other “ETH beta” assets if Ethereum’s price breaks above $5,000.

Conclusion

AAVE’s recent decline is due to a combination of technical challenges, security concerns, and a rotation of funds toward Bitcoin. Key levels to watch: Can AAVE maintain support around $272, or will Bitcoin’s growing dominance push it down toward $250? Keep an eye on Ethereum’s price momentum and any updates on security to spot potential signs of recovery.

What could affect the price of AAVE?

Aave’s price depends on new technology updates, competition in decentralized finance (DeFi), and changing regulations.

1. V4 Upgrade (Positive) – Combining liquidity across networks could increase total value locked (TVL) and attract more developers.
2. Governance Challenges (Mixed) – Budget disagreements might slow progress despite a clear long-term plan.
3. Regulatory Challenges (Negative) – New rules limiting stablecoin yields could reduce fee income.

Detailed Overview

1. V4 Liquidity Hub Launch (Positive Impact)

What happened:
In June 2025, Aave launched its V4 Liquidity Hub, which pools liquidity from multiple blockchains into one place. This makes it easier for users to lend and borrow assets across different networks. Developers can also create custom “Spokes” to serve specific markets like real-world assets (RWAs) or liquidity provider (LP) positions, all tapping into Aave’s combined liquidity. Since the upgrade, daily fees have increased by 200%, reaching $3.5 million as of August 2025 (Aave).

Why it matters:
With TVL now at $60 billion, the platform is generating more fees, which supports demand for AAVE tokens. If more users adopt V4, the protocol’s revenue could fund token buybacks or staking rewards, both of which have historically helped boost AAVE’s price.

2. Governance & Funding Issues (Mixed Impact)

What happened:
Aave’s plan for 2030 includes $12 million per year in grants to support V4 development, reduced from an initial $20 million after community concerns. Some critics say the budget lacks transparency, while supporters point to thorough audits and plans to integrate RWAs (Governance Thread).

Why it matters:
If funding or upgrades are delayed, it could hurt short-term confidence. However, if the proposal passes, it would strengthen Aave’s position across multiple blockchains. Already, integrations with Aptos and Avail Nexus account for 45% of the $1.65 billion borrowed in Q3 2025.

3. Regulatory Risks Affecting Stablecoin Yields (Negative Impact)

What happened:
The U.S. GENIUS Act, passed in July 2025, prohibits stablecoins from earning interest. This affects Aave’s $312 million GHO stablecoin ecosystem. As a result, GHO’s annual percentage rate (APR) dropped from 8% to 4.8%, making it less attractive for users to mint or borrow (Ethena Labs).

Why it matters:
Lower activity with stablecoins could reduce Aave’s fee income, which makes up 60% of its revenue. If DeFi yields can’t compete with traditional finance options like BlackRock’s BUIDL, AAVE’s price might face ongoing downward pressure.

Conclusion

Aave’s price outlook balances promising technology upgrades with governance and regulatory challenges. The V4 rollout and expansion to new blockchains like Aptos and Avail could push TVL to $75 billion by the end of 2025. However, regulatory limits on stablecoin yields remain a significant uncertainty. Will Aave’s partnerships in real-world assets make up for the drop in GHO demand? Keep an eye on fee trends in Q4 and upcoming governance decisions on funding.

What are people saying about AAVE?

The AAVE community is divided between optimism about a technical rebound and caution due to warning signs. Here’s what’s trending:

1. A rising wedge pattern suggests a possible 30% price drop
2. Ethereum’s (ETH) price movement is a key factor for AAVE’s future
3. Short-term traders are watching for a breakout above $305 or a drop below $270

Deep Dive

1. @CryptoPulse_CRU: Rising wedge signals potential 30% drop bearish

“AAVE’s daily chart shows a rising wedge – a classic pattern that often signals a reversal. If the price falls below $280, it could drop to between $222 and $238.”
– @CryptoPulse_CRU (12.4K followers · 38K impressions · 2025-09-07 01:30 UTC)
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What this means: The price is showing signs of weakening momentum. If AAVE closes below $280, it could trigger a larger sell-off as traders’ stop-loss orders get hit.

2. @mkbijaksana: Ethereum’s success is key to AAVE’s rally mixed

“If Ethereum breaks its all-time high, AAVE could reach $576. But if Ethereum struggles, AAVE might correct down to $250.”
– @mkbijaksana (8.7K followers · 24K impressions · 2025-08-24 17:41 UTC)
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What this means: Since AAVE is a leading decentralized finance (DeFi) protocol built on Ethereum, its price closely follows Ethereum’s performance. Keep an eye on Ethereum’s $5,000 resistance level.

3. CoinMarketCap Post: Bulls defend $297 support bullish

“AAVE is recovering above the $297–298 support level. A break above $305 could push the price to $325.”
– Anonymous trader (post date: 2025-08-17 04:38 UTC)
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What this means: The $297–298 range matches AAVE’s 30-day moving average, a key technical indicator. Holding this level suggests strong buying interest, possibly from large investors.

Conclusion

Opinions on AAVE are mixed. Positive on-chain data, like a total value locked (TVL) of $60 billion, contrasts with technical signals that warn of a potential drop. Short-term traders are focused on the $270–$305 price range, while long-term investors watch developments like Horizon’s $25 billion real-world asset pipeline. Pay close attention to the $297–298 support level this week — if it breaks, the bearish wedge pattern could play out, but if it holds, it might indicate accumulation ahead of Ethereum’s next move.

What is the latest news about AAVE?

Aave is adapting to changes in decentralized finance (DeFi) by expanding its platform, partnering with institutions, and boosting yield opportunities. Here are the key updates:

1. Aave Launches on Aptos (August 21, 2025) – The first deployment outside Ethereum-compatible blockchains, aiming to attract users who want faster transactions.
2. Kraken Ink Partnership Finalized (July 21, 2025) – A new lending platform built on Kraken’s network to encourage more institutional use.
3. Aavethena Deposits Surge (August 20, 2025) – More than half of USDe-related assets are now on Aave, supporting new yield strategies.

Deep Dive

1. Aave Launches on Aptos (August 21, 2025)

Overview:
Aave has expanded to Aptos, a blockchain that is not based on Ethereum’s technology. The protocol was rewritten using Move, a programming language designed for better security and faster transactions. This launch includes markets for APT, sUSDe, USDT, and USDC, with limits on how much can be supplied to reduce risk. Chainlink oracles provide reliable price data, and a $500,000 bug bounty program shows confidence in the new system.

What this means:
This move is positive for AAVE because it reaches new users in a faster blockchain environment. However, success depends on attracting enough liquidity and competing with other DeFi projects native to Aptos. (Aave)

2. Kraken Ink Partnership Finalized (July 21, 2025)

Overview:
Aave DAO approved licensing its V3 code to Kraken’s Ink Foundation. This allows Kraken to build a compliant lending platform on its Layer-2 network. The agreement ensures Aave receives 5% of the borrowing revenue and includes programs to encourage $250 million in deposits through liquidity mining.

What this means:
This partnership could provide steady revenue for AAVE but may reduce decentralization, which is a core principle of DeFi. The success of this deal depends on Kraken’s ability to attract regulated financial institutions. (CoinMarketCap)

3. Aavethena Deposits Surge (August 20, 2025)

Overview:
Aave’s collaboration with Ethena Labs and Pendle has led to more than 50% of USDe-related assets (including stablecoins and yield tokens) being deposited on the platform. Users can borrow against these deposits while earning yields, creating a positive cycle of growth.

What this means:
This strengthens Aave’s position as a key liquidity provider in DeFi but also increases risk if the collateral backing USDe weakens. (Aave)

Conclusion

Aave’s expansion across multiple blockchains, partnerships with institutions, and new yield strategies make it a central player in DeFi. However, managing growth and risks will be crucial. The big questions are whether Aptos users will adopt Aave and if Kraken’s platform can attract enough institutional interest to compete in the growing market for real-world assets.

What is expected in the development of AAVE?

Aave’s development plan focuses on improving its protocol, expanding across different blockchain networks, and integrating real-world assets.

1. Aave V4 Security Activation (Q4 2025) – Completing security checks and preparing to launch on the main network.
2. GHO Multichain Rollouts (2025–2026) – Bringing the GHO stablecoin to new blockchain platforms like Gnosis, Avalanche, and additional Layer 2 solutions.
3. Aave Network Development (2026+) – Creating a dedicated blockchain to support GHO and cross-chain liquidity.
4. Uniswap CDP Integration (TBD) – Allowing users to borrow GHO using Uniswap V4 liquidity positions as collateral.
5. Horizon RWA Scaling (Ongoing) – Partnering with institutions to grow markets for tokenized real-world assets.

Deep Dive

1. Aave V4 Security Activation (Q4 2025)

Overview:
Aave V4 is currently undergoing multiple security audits by different firms, with three audits completed and a fourth starting in September 2025. This upgrade introduces a new system called the Unified Liquidity Hub, which aims to make it easier and more efficient to move funds across different blockchains.

What this means:
This is positive news for AAVE holders because it could lower transaction fees by 30–40% (Aave Labs) and attract larger, institutional investors. However, if any issues arise during audits, the launch could be delayed.

2. GHO Multichain Rollouts (2025–2026)

Overview:
Aave Labs plans to launch the GHO stablecoin on multiple blockchain networks, including Avalanche, Gnosis, and new Layer 2 solutions like Plasma and Linea. They are also integrating Chainlink’s CCIP bridge to enable smooth transfers of GHO across these networks.

What this means:
This expansion could increase the use and revenue of the GHO stablecoin, which is a good sign. However, GHO will face competition from other well-established stablecoins. Its success depends on keeping its value stable during market ups and downs.

3. Aave Network Development (2026+)

Overview:
As part of the “Aave 2030” vision, the team is exploring building a new blockchain (Layer 1 or Layer 2) dedicated to running core Aave functions and prioritizing GHO transactions. They are considering technologies like Validium to handle more transactions efficiently.

What this means:
This is a long-term, ambitious plan that could be very beneficial if successful. A dedicated blockchain might handle 15–20% of Aave’s total value locked (TVL) by 2030 (Aave 2030 Proposal). However, there are risks, especially since Ethereum currently dominates decentralized finance (DeFi).

Conclusion

Aave’s roadmap balances near-term improvements like the V4 security upgrade with strategic moves into real-world assets and building its own infrastructure. Maintaining its 20% share of the DeFi lending market (Zoomex) while expanding into new areas will be key. It will be interesting to see how regulatory changes around tokenized assets might speed up adoption of Aave’s Horizon platform.

What updates are there in the AAVE code base?

Aave is making big strides with cross-chain growth and new tools for developers.

1. Aave Launches on Aptos (August 21, 2025) – First launch outside Ethereum-compatible blockchains, using the Move programming language and integrating Chainlink for reliable data.
2. V3 Developer Toolkit Released (August 6, 2025) – New software tools and APIs that make it easier to create lending vaults.
3. V4 Feature-Complete (July 2025) – Core features done, including support for real-world assets and Bitcoin Layer 2, getting ready for public testing.

Deep Dive

1. Aave Launches on Aptos (August 21, 2025)

Overview: Aave expanded to Aptos, a blockchain that doesn’t use Ethereum’s technology. The protocol was rewritten in Move, a programming language designed for better security. Now, users can lend and borrow assets like APT, USDC, and USDT on Aptos.
The integration includes Chainlink Price Feeds, which provide trustworthy price data. The system was carefully tested with security audits, a $500,000 bug bounty program, and a Capture-the-Flag competition to find vulnerabilities. Supply limits will adjust based on demand.
Why it matters: This is positive for AAVE because it taps into Aptos’ fast network, brings in new liquidity, and strengthens Aave’s presence across multiple blockchains. (Source)

2. V3 Developer Toolkit Released (August 6, 2025)

Overview: Aave launched new developer tools including React hooks, software development kits (SDKs), and APIs. These tools make it easier and faster to build lending vaults with customizable risk settings.
Developers can quickly create products that generate yield or focus on borrowing, using Aave’s liquidity pools. Vault managers can also set fees on yields, opening new ways to earn revenue.
Why it matters: This is good news for AAVE because it lowers the technical barriers for developers, encouraging more apps to use Aave’s infrastructure and increasing overall usage. (Source)

3. V4 Feature-Complete (July 2025)

Overview: Aave V4 has completed its main features, including vaults for real-world assets (RWA), support for Bitcoin Layer 2 solutions, and improved stablecoin (GHO) functions.
The upgrade aims to make the platform easier to use by simplifying account management and making it more attractive for institutional investors. A public testnet is expected soon.
Why it matters: This is promising for AAVE because it prepares the protocol to meet growing institutional demand in decentralized finance (DeFi) and to expand into tokenized real-world assets—a market worth over $16 trillion. (Source)

Conclusion

Aave’s updates focus on expanding across blockchains, making development easier, and preparing for institutional use. With the Aptos launch, new developer tools, and advanced V4 features, Aave is solidifying its position as a key player in DeFi. The upcoming V4 testnet could speed up adoption of tokenized real-world assets.