AAVE drops below $100 after Multicoin’s massive token transfer stirs fears

Aave is trading below the $100 mark, with a move from the intraday highs coming as investment firm Multicoin Capital looks to reduce its exposure.

Could the company's move after steeper-than-expected losses add near-term selling pressure to the token?

The decentralized finance giant's native token recently fell below $90 amid security and liquidity concerns.

Is Multicoin dumping 150,000 AAVE?

On-chain analytics indicate that Multicoin transferred 150,000 AAVE, valued at approximately $14.92 million at current prices, to the Galaxy Digital OTC wallet and BitGo early on Friday.

The transactions are likely selling moves.

Lookonchain flagged the movements, with this coming as the Aave price tested the $100 mark.

Notably, Multicoin had accumulated 338,005 AAVE for $73.7 million, with an average entry price of $218.

At the time of the transfers to Galaxy Digital OTC and BitGo, the position was carrying unrealized losses of over $40 million.

Multicoin’s average entry of $218 and a potential partial exit price of $100 could translate to a drawdown of more than 50%.

AAVE price outlook

Despite this sizable disposal, Multicoin has not fully exited the position: on-chain balances indicate roughly 188,000 AAVE remain in the firm’s holdings.

Also, using OTC desks and custodial services like BitGo can reduce immediate spot-market disruption, but market participants caution that continued offloading could exacerbate downward pressure.

Traders are also watching AAVE perpetual futures funding rates, where persistent negative funding would signal short-side bias and could presage further weakness before any deterioration is fully reflected in spot prices.

AAVE faced downside pressure in the wake of the Kelp DAO exploit and related contagion events that unsettled liquidity across DeFi.

Nevertheless, the token has shown a measure of resilience, buoyed by community-led support efforts.

In the past month, AAVE price has held above the $90 area, limiting the rot that followed its crash from above $120.

Technically, Aave is poised near the middle line of a long-term descending channel as support.

Bulls need a decisive breakout to establish a new leg up, while bears could find joy in cracking the support zone.

In the short term, this support cluster sits around the $86-$90 area, a region that has previously acted as a demand zone.

On the upside, immediate resistance could lie at $110-$120. Profit-taking could dominate around these levels if buyers show weakness.

However, momentum on high volume would accelerate the recovery.

Whether Aave price sees a decisive breakout or remains ranged below $100 could depend on broader market conditions.

Currently, risk appetite across the crypto sector is muted. Bitcoin and major altcoins are choppy amid macroeconomic and geopolitical uncertainty.

Meanwhile, whale activity and overall DeFi outlook could also sap or bolster investor confidence.

AAVE traded around $97 at the time of writing.