Aave's $50M Buyback Program Drives 2.91% Weekly Gain

Aave has initiated a significant market move by starting a $50 million buyback program for its native token, AAVE. This program involves purchasing AAVE tokens from the market on a weekly basis, with an annual budget of $50 million and a weekly expenditure of $1 million. The buyback program is designed to reduce the supply of AAVE tokens in circulation, which is expected to act as a catalyst for price growth.

Since the implementation of the buyback program, there has been a notable response from market participants. Investors have been accumulating AAVE tokens, with $13.98 million worth of AAVE changing hands over the past week, including $4.30 million in the last 24 hours. This accumulation is significant as it indicates a long-term commitment to holding AAVE tokens, with many being moved into private wallets.

The market's reaction to the buyback program has been positive, with AAVE registering a 1.11% uptick over the past 24 hours and a 2.91% gain for the week. This growth follows the recent implementation of the token buyback system, which could drive the asset into a rally. However, it remains to be seen whether this will be sufficient to overturn its 20% drawdown from the past month.

The buyback pool may expand further, depending on protocol revenue during this cycle. This approach is designed to instill investor confidence and potentially trigger a supply squeeze. The market has already responded positively, with accumulation picking up and hinting at expectations of a rally.

The 4-hour chart provides better insight, confirming that investors are accumulating the asset as it trades within a symmetrical triangle pattern made of converging support and resistance levels, with price oscillating within it. A breach of the upper resistance line would imply the start of a price rally, with the price target lying between $170 and $187. Stronger market momentum could push the asset back to the $200 region.

The market reaction isn’t limited to accumulation and storage in private wallets. A cohort of investors has moved their AAVE into the protocol, becoming liquidity providers. This influx has propelled the Total Value Locked (TVL) to $18.029 billion — its highest since early April. A growing TVL often implies rising confidence and deeper market roots — both of which support price continuation.

In recent weeks, Aave has focused on several developments aimed at attracting liquidity. Two of the most notable are competitive yields on EUR and the potential launch on Aptos. These developments, combined with the buyback program, are expected to further support the price of AAVE tokens.