Aave slips as bad debt from KelpDAO exploit fuels $84 support risk: weekly outlook

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Aave falls 16.59% this week

Highlights

AAVE faces strong selling pressure, trading well below major moving averages and indicating a firmly entrenched downtrend.
Momentum and trend indicators remain bearish despite oversold oscillators, suggesting limited chances for a meaningful upward reversal in the near term.
Expected trading range for the upcoming week is $84.00–$103.00, with risk skewed toward downside retests unless brief relief rallies emerge.

Liquidity crisis and governance action after an exploit triggers mass outflows

Aave has faced a major operational crisis after an exploit of the KelpDAO protocol on April 18, 2026, which introduced over $190–$292 million in bad debt due to illicitly minted rsETH being used as collateral. This incident caused a rapid drop in total value locked from over $42 billion down to around $15 billion, alongside mass withdrawals and USDC liquidity strain that prompted urgent governance discussions to restore pool stability. In response, Aave, together with key ecosystem partners, launched recovery and bailout initiatives while coordinating with security councils and considering new asset injections to address the platform’s shortfall.

Bearish momentum deepens over week as technicals confirm sellers’ control

Weekly technical analysis shows that AAVE remains firmly below all major weekly moving averages: MA-20 ($127.12), MA-50 ($208.14), and MA-200 ($137.06). Dynamic resistance is defined at the MA-20, while the Ichimoku Kijun ($167.03) is considered too distant to serve as a practical barrier. Weekly momentum indicators remain firmly bearish, as confirmed by the MACD (Strong Sell, -39.06) and ADX (Sell, 32.73), while trending oscillators including RSI (32.30), Stochastic RSI (Strong Buy, 35.24), and CCI (-92.16) indicate growing oversold conditions but have yet to reverse seller dominance. Bull/Bear Power remains strongly negative (Oversold, –15.44), and the price action consistently indicates a decline from the weekly high, with weekly volatility at 34.45%.

Limited upside expected next week amidst volatility and persistent bearish signals

For the coming 7 days, AAVE is likely to trade within a volatile range of $84.00–$103.00, dictated by persistent downside pressure and oversold technical readings. The probability of a significant upward move is low — under 20% — as none of the four major momentum and trend indicators currently signal a buy. The baseline scenario expects price to remain near the $90–$100 area with brief relief bounces possible if oversold oscillators trigger short-term buying. Should selling intensify further, AAVE may retest support closer to $84.00 or face lower spikes in line with the existing downtrend and heightened volatility.

Parshwa Turakhiya, analyst, sees the past week for Aave dominated by heavy selling and negative sentiment as fallout from the KelpDAO exploit drove a sharp drop in both price and platform confidence. Technical readings confirm persistent bearish pressure, with AAVE trading well below key moving averages and all major momentum indicators still favoring the downside. Oversold signals suggest the possibility of temporary relief bounces, but the broad range of $84.00–$103.00 reflects a volatile and sentiment-driven environment. Turakhiya believes that any bounce this week will likely be short-lived unless positive drivers emerge. "I’m staying guarded near $90–$100, watching for signs of stabilization, but not trusting any upside until sentiment and structure visibly shift."

Previously it was reported that the KelpDAO exploit triggered extensive bad debt and cascading liquidity shocks across Aave and the broader DeFi ecosystem. With AAVE now exhibiting persistent bearish technical signals and lingering volatility, traders should closely monitor for potential breakdowns below $84.00, as further downside could accelerate capitulation risk in the days ahead.

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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