AAVE Price Drop 11% in a Day: Reason Behind Sudden Crash and What Next

Reasons for AAVE Price Drop: Will it Recover and Crash Further?

Why did a top DeFi lending token suddenly lose double digits in value? The AAVE price drop has caught traders off guard after a sharp sell-off and fresh governance uncertainty hit the market within hours.

Within 24 hours, the token slipped more than 11%, extending weekly losses to nearly 18%. At the time of writing, price stands at $159.61, with a $2.44B market cap and $581.03M in 24-hour trading volume, based on CoinMarketCap data. 

Source: CoinMarketCap Website

This sudden move has pushed investors to ask a simple question: why is the price falling today, and what comes next?

Why Is AAVE Down Today? Whale Activity Triggers Panic

The first clear trigger behind the AAVE price drop is heavy whale selling. According to Lookonchain, wallet 0xa923 sold 230,350 tokens worth $37.8M in just four hours. The assets that were exchanged include 5,869 stETH worth $17.62M and 228 WBTC worth.

Source: Lookonchain Data

This triggered a lock-in of approximately $13.75M of losses for the whale and inundated the market with supply. The consequence of this is the creation of panic selling, resulting in prices plummeting by almost 10% within a short period. Such large seller movements often impact short-term market sentiments.

Governance Vote Adds More Pressure to the Market

Another key reason behind why the price is dropping lies in protocol governance. Founder and CEO Stani Kulechov confirmed that the team is voting on a proposal to adjust token ownership between December 23 and 26, 2025.

Source: Stani Kulechov X 

The discussion has already been active for over five days through an ARFC temp check, with mixed opinions from the community. Any change in ownership structure can impact governance power and future distribution, which naturally raises uncertainty. This risk is generally factored into market prices well in advance, thus adding to the selling pressure.

AAVE Price Prediction: Levels of Support Determine the Next Step

Technically speaking, the warning continues in the AAVE price forecast.

Price is trading in a medium-term downtrend and below its previous range high. Immediate support sits at $155–150. A daily close below $150 could open the door toward $138–140, a prior liquidity zone.

Source: TradingView

On the upside, resistance stands near $172–175, with stronger supply around $190–200. RSI values are in the mid-40s, indicating weakness in the momentum. A breakout above $175 with strong volume above $650M may give a boost to the bullish trend.

What Should Traders Do Now?

Although the AAVE market situation currently looks quite alarming, this price movement can also be seen as the reflection of short-term fear, as it doesn’t signify any kind of failure on the part of the protocol. The market is bound to observe more fluctuations before the governance vote is concluded.

Conclusion

The fall in AAVE price is a result of intense selling by whales associated with short-term uncertainties in governance, rather than a problem in its fundamental structure. Until further information is released, it is important for investors to prepare for the market to be extremely unpredictable while being cautious not to act on their emotions.

YMYL Disclaimer: This post is for educational purposes only and should not be interpreted as financial advice in any form. Cryptocurrency prices are extremely volatile and carry inherent risks. It is always necessary to DYOR and consult a financial advisor for all of your financial needs.