AAVE is trading above $90 and just above its 50-day exponential moving average (EMA) at $90.80, but a growing list of bearish technical indicators is clouding the outlook — even as deposits on the Aave protocol hit new highs.
Record deposits on Aave V3 and V4
Deposits in Aave V3 on Monad surged by over $500 million in the past month. Meanwhile, Aave V4 deposits reached a record high above $350 million, increasing by more than $100 million over 30 days. The V4 platform is also offering a negative 0.1% borrowing rate for cbETH, WBTC, WETH, and wstETH holders — meaning those borrowers effectively earn interest while they borrow.
Bearish signals in the derivatives market
Despite the strong on-chain activity, the derivatives market is flashing caution. AAVE futures open interest declined by more than 6% in the last 24 hours to $302.15 million. The token's funding rate has turned negative at -0.0046%, indicating that short positions are paying longs — a classic sign of bearish sentiment. The 24-hour long-to-short ratio stands at 0.937, meaning shorts outnumber longs.
Technical indicators point lower
AAVE is trading below its 200-day EMA at $112.75, which suggests limited upside potential in the near term. The MACD indicator is declining below its signal line, confirming bearish momentum. The Relative Strength Index (RSI) is near 49 and trending lower while price is rising, forming a bearish divergence — a pattern that often precedes a price drop.
Key levels to watch
Immediate support sits at the 50-day EMA ($90.80). A close below that level could trigger a 20% decline toward $70.65. On the upside, the first major resistance is at $100, with a broader resistance zone extending to $103.51 — the May 10 high. The next major test will be whether bulls can defend the 50-day EMA, or if selling pressure pushes the token toward the $70 range.
