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Aave News Today: The Two Sides of DeFi: Aave's Expansion Increases Volatility Concerns

Aave News Today: The Two Sides of DeFi: Aave's Expansion Increases Volatility Concerns

Bitget-RWA2025/11/24 04:56
By:Bitget-RWA

- Aave's AAVE token faces volatility risks near 0.57 support level, with whale accumulation and leveraged positions amplifying short-term instability. - A major Aave whale added 24,000 AAVE tokens (total 276,000) at $165 average cost, but remains vulnerable to repeat October 11 liquidation risks. - A $80M WBTC long position on Aave approaches $65,436 liquidation threshold, threatening forced selling and downward price pressure. - Tangem's Aave-integrated stablecoin yield feature highlights protocol's DeFi

The

(AAVE) ecosystem is currently experiencing increased speculative activity, as both on-chain metrics and market trends indicate the possibility of heightened short-term fluctuations. Market participants are paying close attention to the token's price action around the 0.57 support mark—a pivotal level that, if lost, could prompt additional selling. Recent whale transactions and leveraged trades have brought further attention to the mounting risks associated with the DeFi lending protocol’s native asset.

Aave News Today: The Two Sides of DeFi: Aave's Expansion Increases Volatility Concerns image 0

A prominent Aave whale has recently increased their holdings, acquiring 24,000 AAVE tokens and bringing their total to 276,000 AAVE at an average entry price of $165 each. This accumulation,

, demonstrates that large investors continue to show interest despite the token’s history of price swings. Nevertheless, this whale’s position remains exposed to potential downturns, as seen during the October 11 flash crash when part of their leveraged holdings was liquidated at $101, resulting in a loss of 32,000 AAVE.

At the same time,

on an $80 million long bet in (WBTC), reflecting a more cautious stance as the position approaches a $65,436 liquidation point. This position, open since May 2025, consists of 550.2 supplied to Aave and $28.09 million in stablecoin liabilities. Should the price fall to the critical threshold, forced liquidations could occur, potentially intensifying downward momentum for both WBTC and AAVE.

These risks are further magnified by Aave’s growing footprint within the DeFi sector.

that enables users to earn real-time returns on stablecoins through Aave’s platform. While this development highlights Aave’s foundational role in decentralized finance, it also brings up questions about liquidity management and the risks associated with concentrated leverage.

Technical analysis points to a fragile outlook for the AAVE token. Both traders and analysts are watching the 0.57 Fibonacci retracement as a crucial psychological level. A breach could lead to a wider selloff, especially if liquidations pick up pace. “The market is on the verge of a correction,” commented one DeFi strategist, emphasizing that the actions of major holders and leveraged traders often serve as early warnings of broader market stress.

At present, Aave’s ecosystem presents both opportunities and risks: while innovation and user growth are accelerating, the same factors that drive expansion could also introduce volatility if not carefully managed.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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