Aave Price Tumbles Toward $288 As Breakdown Triggers Momentum Shift (Technical Analysis)

Summary Failed breakout at $335 triggers breakdown toward $288 with EMA resistance shifting bearish. $3.3M net outflow on August 18 reinforces distribution and deleveraging pressure. Structural bias remains negative while below $305-312, targeting $275-280 support. Aave ( AAVE-USD ) has dropped sharply to $288 after a failed attempt to reclaim the $335 resistance zone earlier this week. The breakdown from its ascending channel, visible since August 12, triggered a rapid wave of deleveraging, confirmed by $3.3M in net outflows on August 18. Price briefly bounced from the $285-290 support band, but short-term momentum continues to deteriorate as all major EMAs (20/50/100) roll over and begin acting as dynamic resistance near $295-305. Technical and on-chain momentum The RSI remains weak around 41, signaling that bearish momentum persists unless AAVE can recover the $300 psychological level. Liquidation stress has been widespread, with roughly $464M in long positions liquidated across crypto in the past 24 hours, and Aave collateral heavily represented in the unwinding. AAVE price dynamics (Source: TradingView) Technically, the failed breakout above $335 confirmed a bearish head fake, resulting in a full retracement to a long-term February trendline. Unless the price closes decisively back above $312 (the prior breakdown area), the structure favors a continuation toward $275-280 in the near term. Bulls must defend $285 on a daily closing basis to avoid a deeper liquidity probe toward the $268 zone last tapped in late June. On-chain flows offer a mixed view. Recent spot netflows have flipped negative, pointing to renewed exchange supply likely earmarked for sale. However, higher-timeframe accumulation remains visible as whale addresses move multi-million dollar tranches of AAVE into cold storage below $300. This suggests that longer-term participants are beginning to position ahead of upcoming protocol milestones despite near-term technical fragility. Fundamental developments and broader tone Aave is currently in a major transition cycle as it prepares for the rollout of V4, funded by a $12M development grant designed to unify cross-chain liquidity and expand fee capture from 2025 onward. Additionally, the pending institutional lending partnership with Kraken, slated for Q4 2025, introduces the prospect of a new recurring revenue stream. Macro headwinds remain a constraint, however, with Ethereum unstaking delays creating volatility in DeFi funding markets and ongoing Federal Reserve policy tightening continuing to suppress borrowing appetite across decentralized lending protocols. As a result, while the long-term narrative remains constructive, the immediate risk-reward continues to lean bearish unless AAVE can reclaim $305 with strong volume confirmation. In earlier analysis, the $307-312 level was identified as a key pivot following this breakdown . Price now trades below that zone, validating the reversal bias and keeping bears in control unless reclaimed. This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer . While we adhere to strict Editorial Integrity , this post may contain references to products from our partners. Original Post