DeFi Deleveraging Hits AAVE – Analyst Explains Why Borrowing Demand Falls Off A Cliff
Aave entered April 2026 as DeFi’s largest lending protocol. By mid-month, it was managing the fallout from one of the most damaging exploits in its history — and the on-chain data is now revealing just how deeply the event disrupted the protocol’s core activity. The recent drop into the $85–$95 zone marks a critical support test. This area aligns with prior consolidation from late 2023 and early 2024, making it a historically relevant demand region. The current bounce is technically constructive, but it remains corrective in nature until proven otherwise.Related Reading
All major moving averages — 50-week, 100-week, and 200-week — are positioned above price and sloping downward. This creates a stacked resistance structure between roughly $130 and $200, where previous breakdowns occurred. Any recovery attempt will need to reclaim that range to shift the broader trend.
Volume behavior reinforces caution. The sharp selloff phases were accompanied by elevated volume, indicating strong distribution, while the recent rebound has developed on lighter participation.
For now, AAVE is attempting to build a base. Holding above $85 keeps the structure intact. Losing it would likely open the path toward deeper downside.
Featured image from ChatGPT, chart from TradingView.com
About Author
-1.jpg?prefix=media/article-covers "Kustodia launches smart contract escrow for LATAM's 0m fraud crisis")
