AAVE Drops 4.74% Amid Large Holder Sell-Off Despite Bullish Indicators

Over the past 24 hours, AAVE has experienced a slight decline of 4.74%, despite the overall positive market sentiment. This decline can be attributed to large holders selling their assets across the market, which typically leads to a price decrease. However, this sell-off may be temporary, as several bullish indicators suggest a potential short-term increase for the altcoin.

In the last 24 hours, large investors have continued to sell AAVE, with a total of approximately 4,500 AAVE, worth $830,000, being sold to the market. Despite these sell-offs, there has been significant buying activity in the spot market. Spot traders have acquired nearly four times the selling pressure, purchasing $2.39 million worth of AAVE over the last four days. This buying activity is confirmed by the negative exchange netflows, indicating that traders are not only buying but also likely holding for the long term as they move AAVE to private wallets.

The bullish sentiment is further supported by the large holders’ netflows to exchange turning negative, with a reading of -0.08%. This implies that retailers are more dominant in the market, and combined with the earlier buying activity, it suggests that these retailers are dominating through their buying activity. At the time of writing, AAVE had become the most valuable protocol in the market, with a TVL value of $18.433 billion, holding a $450 million lead over Lido. This growth confirms the massive flow of liquidity into the asset and the potential for a major market rally, especially since AAVE buying is expected to soar in the coming days.

In contrast to the spot market, derivative market traders have been flashing completely bearish signals. Open Interest climbed over the last few days, with the same valued at $239.12 million at press time. This underlines a hike in the number of unsettled contracts across the market. As a standalone metric, it doesn’t provide clear insights into what to expect from derivative traders. However, it can be combined with the rising selling volume and the long-to-short ratio dropping to 0.909. Here, a reading below 1 implies that sellers are dominating – indicative of a bearish trend. Concurrently, the funding rate also turned negative, implying that short traders have been paying a premium fee occasionally to maintain their positions. This has contributed to downward pressure on the price charts.