AAVE, the native token of the decentralized lending protocol, has experienced a significant price surge of over 30% this week, reclaiming bullish momentum after a prolonged downtrend. The token traded as low as $87 before climbing to approximately $113, marking a 31% bounce from its weekly low and a recovery from near its 12-month low.
On-chain data from Nansen highlights a key driver behind the move: significant whale accumulation was detected, with two large addresses making major purchases on April 15. This rising on-chain activity suggests whales are positioning for a potential bounce, aligning with a shift in investor sentiment. The token's RSI (Relative Strength Index) has surged to levels last seen near its peak in August 2025, further signaling solid accumulation.
The rally occurs against a backdrop of internal protocol challenges. The Aave ecosystem has recently faced a confidence crisis following the exit of key contributors. Risk management firm Chaos Labs departed, citing fundamental misalignment on risk strategy, complexity from the upcoming V4 upgrade, and unsustainable economics. This followed exits by ACI and BGD Labs, raising concerns about operational continuity and risk framework stewardship.
These headwinds contributed to AAVE experiencing a drawdown of 81.6% from its all-time high, a decline more than twice as severe as Bitcoin's approximate 40% correction from its peak. This underperformance highlights the disproportionate selling pressure on altcoins facing protocol-specific uncertainty in the current cycle.
Despite the turbulence, fundamental protocol metrics show signs of steady growth. The number of active asset holders on the Aave protocol has surged from fewer than 9,000 in January of last year to over 30,000. After a bear market dip, active loans have shown a slight recovery, bouncing from $16.26 billion to $17.5 billion, indicating a potential resurgence in loan demand.
Technically, AAVE is testing a key resistance zone between $115 and $120, which previously acted as support. Analysts note that if the price can overcome this consolidation resistance, it could pave the way for a retest of levels near $180 and $200, representing a potential rally of 50% to 80% from current prices. However, the structure remains fragile, and a failure to hold above $110 could see the price return to its prior range between $95 and $115.
