AAVE Price Drops 23% Despite Record $35 Billion TVL and 85% Revenue Growth

AAVE, a leading decentralized finance (DeFi) platform, saw its token price fall by 23% from its July peak of $337 in early August 2025, despite reporting record-breaking total value locked (TVL) and revenue. The TVL on the AAVE platform surged to an all-time high of $35 billion, up from $21 billion at the start of the year, while annualized revenue exceeded $110 million, reflecting a 49% increase in monthly fees and 85% revenue growth in July. These metrics highlight strong operational performance and growing user engagement on the platform, yet the price decline indicates a complex and mixed sentiment among investors [1].

The recent price movement of AAVE is attributed to broader market volatility and cautious investor behavior in the DeFi sector. Despite AAVE’s robust on-chain performance, including rising TVL and increased loan activity, the token has fallen below its 50-day and 100-day exponential moving averages, nearing a critical support level around $250. Technical indicators such as the Relative Strength Index (RSI) are approaching oversold territory, suggesting potential short-term stabilization. A sustained rebound above this level could push the price toward $312, but a break below $250 may signal further downward pressure [1].

Ethena, a key participant in the AAVE ecosystem, contributed significantly to the TVL surge, with its holdings expanding by over $1 billion within two days. This rapid growth underscores the platform’s appeal as a hub for liquidity and asset management, further reinforcing its role as a central player in DeFi lending. Meanwhile, the competitive landscape remains intense, with platforms like Morpho, Compound Finance, and Maple Finance expanding their offerings. Despite this, AAVE continues to demonstrate resilience, maintaining a strong position in the sector [1].

The disconnection between AAVE’s price and its fundamentals highlights the evolving dynamics of DeFi market behavior. While TVL and revenue growth are traditionally seen as positive indicators, they may not always align with price action in a market characterized by high volatility and shifting risk preferences. Institutional investors are increasingly favoring assets with clearer regulatory clarity and stable returns, while retail traders remain drawn to speculative opportunities. This divergence in investor priorities may explain the mixed reaction to AAVE’s strong on-chain performance [1].

Looking ahead, AAVE’s price trajectory will depend on broader macroeconomic factors, regulatory developments, and the continued evolution of the DeFi ecosystem. If the market continues to prioritize efficiency and scalability, AAVE is well-positioned to benefit from renewed interest. However, without a clear catalyst for momentum, the token may remain in a consolidation phase as traders await stronger directional signals [1].

Source: [1] AAVE Price Declines Amid Record TVL and Revenue Growth, Indicating Mixed DeFi Market Sentiment (https://en.coinotag.com/aave-price-declines-amid-record-tvl-and-revenue-growth-indicating-mixed-defi-market-sentiment/)