Aave price was hovering around $343 on Thursday after correcting more than 6% this week. Due to the recent decline, total liquidations were $5.13 million, with 84% coming from long positions. The AAVE NPL indicator has shown a significant spike, suggesting that holders are realizing profits and increasing selling pressure.
AAVE price is hovering around $343 on Thursday after correcting more than 6% this week. Due to the recent economic downturn, total liquidations reached $5.13 million, of which 84% were from long positions. Aave's Network Realized Profit and Loss (NPL) indicator has shown a significant spike, suggesting selling pressure is building as holders realize profits, suggesting a double-digit correction ahead. are.
Ave's bull shows signs of fatigue
Aave prices faced a correction on Tuesday after reaching the $400 level on Monday, following a rise of more than 30% in the previous week. As of this writing Thursday, it is hovering around $343.
If AAVE continues its decline, it could extend the decline by 17% and retest the next support level at $284.63.
The Relative Strength Index (RSI) on the weekly chart is 74, above the overbought level of 70, and is trending downward, indicating weaker bullish momentum. If the RSI falls below the overbought level, it could indicate an upcoming downtrend.
AAVE/USDT weekly chart
Aave’s recent decline on Wednesday triggered a wave of liquidations totaling over $5.13 million, 84% of which were due to long positions, according to Coinglass data.
Such liquidations could create fear, uncertainty, and doubt (FUD) among AAVE investors, increasing selling pressure and leading to further price declines.
AAVE liquidation chart. Source: Coinglass
AAVE’s network realized profit and loss (NPL) metric from on-chain data provider Santiment lends further credence to the bearish outlook. The non-performing loan index showed a significant spike on Tuesday, increasing almost 12 times in one day from 24.29 million to 292.44 million. A sharp rise in a coin's NPLs indicates that holders of that coin are selling their bags at a significant profit on average, increasing selling pressure. A similar movement was seen on February 24, 2021, when the indicator spiked almost 20 times in one day, and over the next five days, the price of AAVE fell by 25%.
AAVE bad debt chart. Source: Santiment
