Daily Crypto Analysis: AAVE Plunges 10% After Whale Dumps $37.6M in Tokens

• An anonymous whale sold 230,350 AAVE tokens worth $37.59 million over three hours, swapping for stETH and WBTC.
• AAVE price dropped approximately 10% following the sale, currently trading at $161.70.
• Market structure suggests a Liquidity Grab below key support, with extreme fear sentiment (score: 25/100) amplifying volatility.
• Technical analysis identifies $150 as Bullish Invalidation and $175 as Bearish Invalidation levels.

NEW YORK, December 22, 2025 — In a stark example of whale-driven volatility, AAVE token plunged nearly 10% after an anonymous address offloaded $37.6 million in tokens, according to on-chain data. This daily crypto analysis event highlights the fragility of DeFi assets amid broader market fear, with the global crypto sentiment index hitting "Extreme Fear" at a score of 25/100. Market structure suggests this move may represent a Liquidity Grab, targeting weak hands below critical support levels.

Market Context & Background

Similar to the 2021 DeFi summer correction, where large holders triggered cascading liquidations, this whale activity the persistent sensitivity of altcoins to concentrated sell pressure. Historical patterns indicate that such events often precede short-term capitulation phases, especially when aligned with macro uncertainty. The current environment mirrors late 2023, when regulatory scrutiny and rising interest rates pressured risk assets, leading to similar liquidity crunches in tokens like AAVE. According to the Federal Reserve, monetary policy remains tight, exacerbating market fragility. Related developments include extreme fear sentiment and macro catalysts driving Bitcoin volatility.

What Happened?

On December 22, 2025, an anonymous whale address beginning with 0xa923 executed a series of transactions over three hours, selling 230,350 AAVE tokens. According to data from Onchain Lens, the whale swapped these tokens for assets worth a combined $37.59 million, including 5,869.46 stETH ($17.52 million) and 227.8 WBTC ($20.07 million). The sale was immediately followed by a price drop of approximately 10% in AAVE. As per CoinMarketCap, the token is currently trading at $161.70, down 9.57% over the past 24 hours. This activity represents one of the largest single-day disposals of AAVE in recent months, highlighting the impact of whale movements on illiquid DeFi markets.

Technical Analysis & Price Action

Market structure suggests the sell-off created a Fair Value Gap (FVG) between $170 and $165, which may act as a future resistance zone. The price broke below the 50-day moving average at $168, indicating bearish momentum. RSI readings dipped into oversold territory at 28, suggesting potential for a short-term bounce, but volume profile analysis shows weak buying interest at current levels. A key Order Block formed near $155 during the 2024 consolidation phase, now serving as critical support. Bullish Invalidation is set at $150; a break below this level could trigger further declines toward $140. Bearish Invalidation is at $175, where resistance from the 200-day moving average converges with the FVG. For context on broader market trends, see Bitcoin's recent price action amid fear sentiment.

By The Numbers

Why It Matters

For institutions, this event highlights the liquidity risks in DeFi tokens, potentially leading to increased hedging activity or reduced exposure. Large sell-offs can trigger margin calls and liquidations in leveraged positions, amplifying downside volatility. For retail traders, it the importance of monitoring whale wallets and on-chain metrics to anticipate price movements. The broader implication is a reinforcement of Bitcoin dominance, as capital rotates into safer assets during fear phases. This aligns with historical trends where altcoins underperform during market stress, as discussed in analyses of altcoin season indices.

Community Sentiment

Market analysts on X/Twitter have noted the whale's move as a strategic de-risking amid uncertain macro conditions. One commentator stated, "The swap into stETH and WBTC suggests a flight to more liquid, blue-chip assets, rather than a full exit from crypto." Others point to the extreme fear sentiment as a contrarian indicator, with some bulls arguing that oversold conditions in AAVE could present a buying opportunity if support holds. However, sentiment remains cautious, with many emphasizing the need to watch for follow-through selling.

Price Prediction / Future Outlook

Bullish Case: If AAVE holds above the $150 Bullish Invalidation level and RSI rebounds from oversold territory, a retracement toward $175 is plausible. This scenario would require a reduction in selling pressure and a stabilization in broader market sentiment, possibly driven by positive regulatory developments or institutional inflows.

Bearish Case: A break below $150 could trigger a cascade toward $140 or lower, especially if whale activity continues or macro conditions worsen. This would invalidate the current support structure and likely prolong the downtrend, with further losses possible if fear sentiment persists.

FAQs

What caused AAVE to drop 10%?The drop was triggered by a whale selling 230,350 AAVE tokens worth $37.59 million over three hours, according to on-chain data.

How does whale activity affect crypto prices?Large sell-offs by whales can create liquidity imbalances, leading to sharp price declines, especially in tokens with lower market depth.

What is the current support level for AAVE?Technical analysis identifies $150 as a key support and Bullish Invalidation level, based on historical Order Blocks.

How does extreme fear sentiment impact the market?Extreme fear (score: 25/100) often correlates with heightened volatility and potential capitulation, but it can also signal oversold conditions for contrarian trades.

What are the invalidation levels for AAVE?Bullish Invalidation is at $150; a break below suggests further downside. Bearish Invalidation is at $175; a break above could indicate a trend reversal.

Data source: Read Original Report

Source Note: Market data and factual reporting in this article are sourced from original reports. Commentary and analysis provided by CoinMarketBuzz.