Aave Price Risks 14% Drop as Short Positions Hit 1-Month High at 0.82

Aave (AAVE) is under selling pressure again, with the price retesting a previously broken ascending trendline...

Written by: Arslan Butt • Tuesday, August 5, 2025 • 1 min read

• Last updated: Tuesday, August 5, 2025

Quick overview

Aave (AAVE) is experiencing selling pressure, retesting a broken ascending trendline with bearish momentum building.
The long-to-short ratio has dropped to 0.82, indicating a clear bearish sentiment among traders.
Technical indicators show weakness, with AAVE failing to regain bullish momentum after a recent drop.
For a bullish reversal, AAVE needs to close above $282.84, while current metrics suggest continued volatility.

Aave (AAVE) is under selling pressure again, with the price retesting a previously broken ascending trendline. Bearish momentum is building up, both technically and on-chain. According to Coinglass, the long-to-short ratio has dropped to 0.82 – the lowest in a month – indicating a clear bearish sentiment.

Meanwhile, CryptoQuant data shows that the Spot Taker Cumulative Volume Delta (CVD) has been in the red since mid-July, declining steadily. This metric measures the net difference between market buys and sells. A negative, falling CVD means sell orders are consistently more than buy orders – a Taker Sell Dominant Phase.

These metrics combined suggest traders are getting more convinced Aave’s price will go down in the short term.

Technicals Say Bearish

Aave broke below the ascending trendline that was in place since early April and dropped 5% in 2 days. It bounced from the 200-day EMA at $242.27 but failed to regain bullish momentum. As of Tuesday, AAVE is at $262.13 and showing weakness again.

Key technicals:

RSI at 40: Below 50, bearish
MACD Bearish Crossover: Trend is still down
Failed Trendline Retest: Price can’t get back above broken support

If AAVE breaks below $242.27 again, it could go down to $225.64, the 50% Fibonacci retracement – 14% from current price.

Aave Price Chart - Source: Tradingview — Aave Price Chart – Source: Tradingview

What Could Trigger a Bounce?

Although the outlook is bearish, a bounce isn’t ruled out. For bullish momentum to resume, AAVE needs to close above the daily resistance at $282.84. A sustained break could see the token retest the July 18 high of $349.23 – a sign of investor confidence.

Reversal triggers to watch:

Break above $282.84
RSI above 50
MACD bullish crossover

Until then, be prepared for more volatility, especially with derivative metrics and momentum indicators pointing down.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.