Aave has dropped 11% in 24 hours to trade at $90.25 amid rising market pressure. The decline has outpaced the broader crypto market, which slipped about 2.25%.
Investors have shifted capital away from higher-risk assets as uncertainty grows.
This trend has placed additional pressure on altcoins, including Aave.
Aave freezes rsETH after security incident
Aave confirmed that rsETH on the Ethereum mainnet remains fully backed by collateral. However, the protocol froze the asset across Aave V3 and V4 deployments as a precaution. The team stated that exposure to the incident remains capped while evaluations continue.
According to Aave, Wrapped Ethereum reserves were also paused across affected markets. These include Ethereum, Arbitrum, Base, Mantle, and Linea. The platform said the move aims to limit further risk during the review process.
Reports indicated that the attacker exploited forged LayerZero cross-chain messages. The exploit enabled the withdrawal of 116,500 rsETH from a bridge contract.
The attacker then deposited the tokens into lending platforms, including Aave, to borrow WETH. This process created a significant uncollateralized bad debt risk.
Liquidity declines as capital shifts to Bitcoin
On-chain data showed that user behavior shifted following the incident. Large holders withdrew funds from the protocol, reducing available liquidity.
This trend reflected precautionary positioning rather than panic selling.
DeFi tracking platforms reported a sharp decline in total value locked. Aave’s TVL dropped by over 30%, falling from $26.4 billion to nearly $18 billion.
The drop signaled lower participation and a more conservative approach among users.
At the same time, broader market pressure added to the downside. Inflows into Bitcoin exchange-traded funds redirected liquidity away from altcoins.
Institutional capital continued favoring larger, established assets during uncertain conditions.
The $90 level has acted as a key support zone. Holding above it could help stabilize price action.
A break below $90 could open the path toward the $85 to $87 range. Recovery may depend on improved sentiment and reduced selling pressure.
AAVE price analysis signals weak recovery after sharp pullback
Aave’s 1-day chart is showing a broad sideways-to-bearish trend over the observed period. Aave price initially pushed higher toward the $120 zone but failed to sustain momentum.
Lower highs gradually formed, indicating selling pressure was building. A sharp rejection near the recent peak triggered a strong bearish move back toward the $90–$95 support area.
The latest candles show a minor bounce, but the price remains below key resistance levels. Overall, the structure suggests a weakening trend with short-term consolidation after a decline.
The RSI (14) sits near 43, staying below the neutral 50 level. This signals weak momentum and a lack of strong buying pressure.
Meanwhile, the MACD shows a recent bullish crossover attempt, losing strength. The histogram is flattening, indicating fading momentum after a brief upside push.
The MACD line remains below the signal line, reinforcing the possibility of continued consolidation or further downside.
