What’s Next for AAVE Following Wintermute’s $4.1 Million Withdrawal?

Wintermute’s withdrawal of 24,124 AAVE, valued at about $4.1 million, has boosted confidence in AAVE's market status.
The act suggests robust accumulation by whales, indicating intent rather than indecision.
AAVE is showing signs of price recovery after trading within its demand zone.
Buyers are gaining control, signaling a potentially significant trend shift.

Key Takeaways

Wintermute’s withdrawal of 24,124 AAVE, valued at about $4.1 million, has boosted confidence in AAVE's market status.
The act suggests robust accumulation by whales, indicating intent rather than indecision.
AAVE is showing signs of price recovery after trading within its demand zone.
Buyers are gaining control, signaling a potentially significant trend shift.

Mapping what's next for AAVE after Wintermute's $4.1 mln withdrawal

Overview of AAVE’s Market Dynamics

On November 24, Wintermute withdrew 24,124 AAVE tokens, roughly equating to $4.1 million, from Kraken. This significant move has injected renewed confidence into the market for AAVE and demonstrates a clear shift in the behavior of large investors, often referred to as whales.

Whales typically execute such large transactions with a purpose, reflecting their strategic positioning within the market. The withdrawal aligns with AAVE's recent attempts to rebound from a broader downtrend, capturing attention as whale liquidity often influences price movements in volatile markets.

AAVE is currently situated within its demand zone, specifically between $150 and $160, where this latest activity from Wintermute creates a favorable scenario. This suggests that strategic buyers are starting to prepare for a more substantial price movement.

AAVE Prices Are Rebounding

At press time, AAVE was trading around $169, having recently bounced back from the demand zone. The price chart illustrated a descending channel that confined AAVE’s price action for several weeks; however, the recent recovery pattern indicates a break from this trend.

Buyers are now facing an initial resistance point at $179, a crucial level to reclaim. Successfully breaking above this could pave the way for an increase towards $232, where previous supply factors have inhibited momentum.

Additionally, the Relative Strength Index (RSI) has moved up from 39 towards its moving average, indicating early signs of renewed momentum among buyers. Importantly, the RSI showed no signs of divergence, suggesting that buyers are ready to take action.

The reaction from the demand zone confirms that buyers are aggressively protecting value areas, solidifying a potential mid-trend shift.

AAVE price action Source: TradingView

Rising Buyer Confidence

The Spot Taker Cumulative Volume Delta (CVD) shows sustained buyer dominance over the past 90 days, reflecting more aggressive buying than selling activity. This prominence of taker-side behavior indicates a strong market conviction from buyers.

The CVD has been steadily increasing, implying buyers are consistently lifting offers while absorbing liquidity. This pattern aligns neatly with the recent rebound from the demand zone and supports the idea of an impending trend shift.

Typically, whales prefer to enter the market when there is an indication that buying pressure is overpowering selling activity. This positive accumulation of market participants creates a supportive structure for price action when testing critical levels such as the current resistance at $179.

CVD Analysis Source: CryptoQuant

Long Positions on Binance Show Dominance

The Long/Short Ratio on Binance experienced a significant uptick, now sitting at 1.56, with long positions constituting 60.95% of the trades. This shift marks a notable change in sentiment, as traders had previously shown strong bearish tendencies during the downtrend.

The increase in long positions is typically seen close to price bottoms, particularly when paired with rebounds in the demand zone. Liquidation statistics reveal substantial losses for short positions, extenuating the pressure to exit those trades. This environment enhances the likelihood of short squeezes as prices advance toward the $179 resistance level.

Moreover, the consistent increase in long trading activity coincides precisely with whale accumulation, and market participants are eager to see if this collective momentum can trigger a decisive breakout.

Long/Short Ratio Source: CoinGlass

Currently, AAVE is at a crucial juncture. The combination of whale accumulation, buyer control over spot flows, and dominance of long positions in derivatives all signal a compelling possibility for a rebound from its demand zone. A clear break above $179 would further confirm this shift, paving the way for higher price levels.