Despite Aave's proactive $50 million token buyback program designed to bolster market confidence and drive value, the leading DeFi protocol finds itself grappling with significant bearish pressure. While the initiative initially sparked a rally, broader market weakness has since overshadowed its positive impact, raising concerns about AAVE's short-term price trajectory.
Aave's Buyback Initiative Faces Market Headwinds
Launched in May as a pilot, Aave's buyback program has successfully repurchased over $22 million worth of tokens, with an ongoing commitment to buy up to $1.75 million weekly. This deflationary mechanic, coupled with general market strength at the time, propelled AAVE's price to an August high of $385. However, this momentum proved short-lived. Following a broader market downturn, particularly Bitcoin's recent slump below $108k, AAVE's price has struggled, currently contesting the crucial $200 psychological level, with bears seemingly gaining the upper hand.
Mounting Bearish Pressure and Key Technicals
Several indicators point to a continued bearish outlook for Aave. Analysis of taker buy/sell volume reveals a persistent dominance of selling pressure, indicating a lack of bullish strength to push prices higher. The Long/Short Ratio, specifically at 0.918, further reinforces this, suggesting an imminent price decline. Technically, AAVE has decisively broken down from a significant range between $221 and $336, turning the $210-$225 zone into a formidable resistance. The daily chart confirms a month-long downtrend characterized by lower highs and lower lows, alongside a bearish crossover of its 20-day and 50-day moving averages. Experts anticipate a further slide, with crucial support levels now resting at $170 and $141.
