Aave Is Down 18% And Carrying $196M In Bad Debt, But Smart Money Is Buying Anyway
Aave is having one of the worst weeks in its history. On April 18, attackers exploited a vulnerability in KelpDAO’s rsETH bridge and deposited the stolen tokens as collateral on Aave V3, borrowing roughly $196 million in wrapped ether against assets the protocol had no reason to reject at the time. The bad debt was not caused by a flaw in Aave’s own code — but that distinction has done little to calm the market’s reaction. However, the most recent price behavior suggests a potential shift in momentum. After the sharp sell-off into the $85–$90 zone, AAVE has begun to stabilize, forming a short-term base with multiple attempts to hold this level. This type of price compression often signals that aggressive selling pressure is starting to fade, even if buyers have not yet fully taken control.Related Reading
Volume adds an important layer. The recent spike in activity, particularly during the bounce toward the $110 area, indicates that participation is returning. The subsequent pullback into the $90 range, combined with elevated volume, suggests that both sides are actively positioning, not disengaging.
For a meaningful structural shift, AAVE would need to reclaim the $110–$120 region and sustain momentum above it. Until then, the current price action reflects a fragile stabilization phase within a broader downtrend, where the balance between exhaustion and renewed selling remains unresolved.
Featured image from ChatGPT, chart from TradingView.com
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