AAVE - Down 1.69% in 24 Hours Amid Market Volatility and DeFi Sector Shifts

On October 30, 2025, Aave (AAVE), the native token of the decentralized lending protocol Aave, fell 1.69% within the last 24 hours, settling at $226.51. Over the past 7 days, the token has declined by 1.14%, while the one-month and one-year drops stand at 18.47% and 27.56% respectively. These movements have drawn attention to Aave’s role in a broader DeFi landscape that has seen mixed outcomes in late 2025.

The DeFi sector continues to evolve with new entrants and technological improvements. One such project, Mutuum Finance (MUTM), has emerged as a promising alternative in the decentralized lending space. Priced at $0.035 during its ongoing presale, MUTM has raised over $18.1 million and attracted more than 17,500 holders. Analysts have highlighted MUTM’s presale structure, yield-bearing mtTokens, and a planned over-collateralized stablecoin as potential catalysts for long-term value.

Despite the competition, Aave remains a foundational platform in the DeFi space. The token’s performance, however, has lagged in recent months due to market-wide corrections and shifts in investor sentiment. The decline in Aave’s price has been mirrored by other DeFi tokens, reflecting a broader market reassessment of risks and returns in the sector.

In late October 2025, the broader market context saw significant earnings announcements from various sectors, including tech, healthcare, and industrials. While these did not directly impact Aave, they contributed to the volatile environment that has pressured DeFi assets. The earnings performance of companies like AerCap and Aptiv showed resilience in traditional markets, further drawing capital away from riskier assets such as DeFi tokens.

Technical indicators for Aave suggest a bearish near-term trend, with the token remaining below key support levels. The RSI stands at oversold territory, but the MACD histogram has shown weak bullish momentum. Traders and investors are closely watching for signs of a reversal or a continuation of the downward trajectory.

Backtest Hypothesis

To evaluate potential investment strategies in the current Aave context, a backtesting framework has been proposed that examines price reactions following significant market moves. The hypothesis involves identifying events where Aave declined by 10% or more on a daily close basis and analyzing the subsequent price behavior over a defined holding period.

Using historical data from 2022 to 2025, the backtest would focus on Aave’s price dynamics after such events. The test could include a holding period of 1–20 trading days to capture short-term rebounds or further declines. If the holding period is set at 20 days, the objective would be to determine whether Aave historically bounces from large corrections or continues to trend lower.

Risk controls, such as a stop-loss at 5% or a take-profit at 8%, could be implemented to manage downside risk. The test would use close prices and could be expanded to include volume and sentiment indicators in future iterations. A similar approach could be applied to other DeFi tokens like Mutuum Finance to compare relative performance post-volatility.