AAVE Retraces Below $300 as $278 Becomes Critical Support Amid Bearish Momentum

AAVE is currently under bearish pressure following a failed attempt to break above the $336 resistance level. The price has since retreated below $300, with $278 emerging as a critical support zone. The rejection at $336 triggered a bearish engulfing candle, shifting short-term momentum to sellers. As of August 16, the asset settled near $296, having fallen below key support at $317 earlier in the week [1]. Analysts are closely watching whether AAVE can stabilize at $278 or face a deeper correction toward $231, the early August swing low where previous buying interest was observed [2].

Despite the immediate bearish bias, long-term bulls argue that AAVE remains within an ascending parallel channel that has supported an uptrend since April 2025. The price has consistently formed higher lows, reinforcing the idea that the broader trend remains intact [3]. Sjuul of AltCryptoGems highlights this structure, noting that AAVE has historically bounced off key support levels such as $160, $200, and $260, each time fueling subsequent rallies [4]. A successful retest and break of the $336 level could set the stage for a move toward $360 or even $400, levels not seen since early 2024.

Meanwhile, AAVE continues to solidify its position in the DeFi ecosystem. The protocol has achieved over $3 trillion in lifetime deposits, a metric that underscores its significance among decentralized finance platforms. Additionally, active borrows have surpassed $25 billion, and recent liquidity injections, including support from Coinbase’s Stablecoin Bootstrap Fund, have further strengthened its capital markets [5]. These fundamentals suggest that AAVE retains strong underlying value despite its current price struggles.

The market’s focus remains on $278 as the key short-term pivot. A decisive break below this level could trigger a bearish cascade, potentially exposing the $231 support. Conversely, a rebound above $317–$320 could signal a reinvigoration of the bullish trend and set the stage for renewed attempts to reclaim $336 and beyond. The asset is now at a crossroads, with its immediate direction hinging on whether bulls can defend key support or bears gain full control of the near-term narrative.

[1] $AAVE price fell below $300 after being rejected at $336.

[2] Bears are targeting support levels at $278 and $231.

[3] AAVE has respected an ascending parallel channel since April 2025.

[4] AAVE has formed rounded bottoms at $160, $200, and $260.

[5] AAVE has surpassed $3 trillion in lifetime deposits.

Source: [1][2][3][4][5] AAVE Faces Key Support at $278 Amid Bearish Pressure and Long-Term Growth Potential (https://en.coinotag.com/aave-faces-key-support-at-278-amid-bearish-pressure-and-long-term-growth-potential/)