- AAVE is down 20.52% over the past month.
- One analyst predicted a potential drop to $203 amid increased selling.
Since we made $361 a week ago, Aaf [AAVE] is struggling to maintain upward momentum. During this period, the altcoin has fallen to a low of $272.
At the time of writing, AAVE was trading at $282, down 2.61% on the daily charts. The altcoin has also fallen on the weekly and monthly charts, down 17.17% and 20.52% respectively.
Recent market conditions have made analysts pessimistic and predict a further dip. Popular crypto market analyst Ali Martinez has suggested a possible dip to $203, citing a sell signal.
Market sentiment
In his analysis states Martinez noted that the TD Sequential Indicator has signaled a sell off on the AAVE on weekly charts.
According to him, this signal points to a potential dip to $264 and even $203 to the lower downside. When the TD sequential sells, it suggests that the uptrend has been exhausted and a downturn is possible.
Therefore, as sellers enter the market, we may see downward pressure build, which could result in a further decline.
What AAVE’s graphs suggest
While the above analysis is a cautionary tale for holders, it is essential to monitor other market indicators.
AAVE’s Relative Strength Index (RSI) has fallen to 41, with a continued decline since the bearish crossover. This confirms the strong selling pressure, with sellers dominating the market.
Source: Tradingview
The Advance Decline Ratio (ADR) has also fallen to a monthly low of 0.31. When the ADR falls below 1, it indicates that AAVE is making more losses than gains.
With the altcoin closing with lower lows, this reflects strong downward pressure.
Source: Santiment
Looking further, AAVE has experienced a sharp decline in network activity, as evidenced by a rising NVT ratio. This has increased to 1124, indicating that the altcoin’s market capitalization is high relative to transaction activity.
This indicates that the altcoin is overvalued relative to its usage.
Source: Santiment
This phenomenon is further confirmed by a negative DAA divergence price. If this remains negative for a long time, it reflects declining network usage and indicates a possible correction to meet actual demand.
Source: Santiment
Finally, there is an oversupply of AAVE, which indicates a greater inflow into the stock exchanges. As such, the stock-to-flow ratio has fallen to zero, and has remained so for the past three days.
With the altcoin showing an oversupply, it could decline due to excessive selling pressure.
Read Aave’s [AAVE] Price forecast 2025–2026
Simply put, AAVE is experiencing strong downward momentum as sellers dominate the market.
These conditions position the altcoin for further decline. If sellers continue to dominate, AAVE could fall to $272, with a further dip to $246. However, a trend reversal could see the altcoin regain the $300 level.