AAVE weekly forecast: downside risk persists — support eyed at $138 as resistance holds near $232

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Aave slips 3.49% this week

Highlights

Aave's DAO lost $500 million in market cap after a public dispute with Aave Labs over CoW Swap fee revenues, catalyzing new governance proposals on IP and branding.
The share of tokens held by large investors rose from 72% to 80% as major holders moved assets into long-term storage despite opposition from Wintermute.
Aave posted record weekly revenues, total deposits climbed 60% year-over-year, lending balances reached $23.7 billion, and the Aave V4 Risk Premiums upgrade was implemented to boost collateral efficiency.

Market cap loss and governance rifts drive accumulation by large holders

Aave's DAO faced a public dispute with Aave Labs over the allocation of swap fee revenues from a CoW Swap integration in December 2025, which led to $500 million in market cap loss and prompted new governance proposals around intellectual property and branding control. Despite opposition from major players such as Wintermute, the share of tokens held by large investors increased from 72% to 80% as they moved tokens into long-term storage. The protocol set new records in weekly revenues, saw its total deposits climb by about 60% year-over-year, reached $23.7 billion in lending balances, implemented the Aave V4 Risk Premiums upgrade to improve collateral efficiency, and pressed forward with initiatives for user-friendly DeFi adoption and fintech integrations.

Bearish momentum dominates as technicals signal persistent oversold conditions

Weekly technical analysis confirms negative momentum for AAVE, with price sustaining below all major weekly averages except for the MA-200, which acts as the next strong support at $138.26. The MACD and ADX on the weekly chart underscore the dominance of bearish sentiment, while RSI, CCI, and Stoch RSI show mild-to-moderate oversold signals. The Awesome Oscillator aligns with the prevailing downtrend, weekly BBP remains in oversold territory, and moderate volatility persists with support and resistance set at $138–$168 and $232.75, respectively.

Consolidation and further downside risk expected in the coming week

Looking ahead to the next 5–7 trading days, AAVE is likely to consolidate within a range of $155 to $168, consistent with current signals suggesting further downside risk. There is less than a 20% probability of a rebound above $168, so additional declines remain the base-case scenario. A break below $155 could open the way to the $148–$150 support zone if selling pressure intensifies, while a short-term recovery would face resistance at $172–$180 in a bullish scenario.

Jainam Mehta, market strategist, notes that Aave’s multi-week bearish momentum remained unchecked as price sustained well below key averages, while last week’s sharp protocol governance drama highlighted deepening uncertainty. He sees ongoing investor repositioning and technical oversold signals clashing with strong negative trend markers, suggesting the coming week favors further rangebound weakness. Mehta believes a failed rebound above $168 keeps downside risk dominant, with $155 and $148–$150 as key levels to watch for tactical moves. "With both technicals and sentiment still in flux, I remain on guard for further dips but would only consider contrarian entries if sellers decisively fade near the $150 support zone."

Previously it was noted that Aave’s technical structure suffered a momentum breakdown, with both short- and medium-term EMA support lost and momentum turning bearish. The article highlighted that attempts at recovery would likely remain corrective as long as the price remains below the as long as the price remains $169 to $172 resistance band.

Source of Data: AAVE Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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