Aave Labs has announced a new governance initiative that could redefine the future direction of the cryptocurrency sector’s leading lending protocol.
While on paper this development appears to be a sound initiative, the AAVE price is not reflecting this due to investor actions.
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AAVE launches new governance model
The proposal, dubbed “Aave Will Win,” asks Aave DAO to approve a comprehensive roadmap centered around the upcoming V4 upgrade. If approved, V4 will serve as the core infrastructure for the next phase of the protocol, establishing a framework in which 100% of the revenue from products developed by Aave Labs will be allocated directly to the DAO.
Despite the rollout of new governance models, AAVE prices remain under pressure. Based on the Money Flow Index, the token is currently in oversold territory. Recent findings suggest that macro-driven selling pressure may have peaked after several sustained outflows.
Historically, AAVE prices have rebounded after entering oversold conditions. Oversold signals often reflect sell saturation, and buyers gradually intervene. However, due to widespread weakness in the crypto market and cautious investor sentiment, this setup will not be as easy as in previous recovery cycles.
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AAVE holders are still on sale
Exchange net position change data shows that selling pressure continues to prevail. Net inflows to exchanges indicate that holders are migrating AAVE to trading platforms. This behavior usually indicates an intention to sell rather than accumulate.
Stronger capital outflows and sustained foreign exchange inflows could delay a potential rebound. Even positive protocol developments have not triggered immediate upward momentum. Market participants appear to be focusing more on liquidity conditions and risk appetite than on strengthening governance.
AAVE price remains above support
AAVE price is trading at $111 at the time of publication, above the 23.6% Fibonacci level of $109. This level is widely seen as a bear market support floor. Maintaining this support is important to prevent more serious structural weaknesses.
Technical signals are mixed, suggesting that AAVE could consolidate above $109 in the short term. The price is likely to remain range-bound below the $119 resistance level until the momentum stabilizes. However, AAVE could fall below $100 if confirmed below $109.
AAVE could rebound from $109 if selling pressure eases and investors regain confidence. A break above $119 would indicate an improvement in sentiment. A breakout of $128 could pave the way to $136 and invalidate the general bearish outlook.
