- AAVE price is poised for a potential rebound from the support trendline of a falling wedge pattern.
- AAVE’s open interest (OI) increased from $211 million to $321 million over two weeks, indicating a leverage build up in its futures market amid the anticipation of potential price move.
- A fresh higher low formation in relative strength index (46%) indicator suggests rising recovery momentum in AAVE.
AAVE, the native cryptocurrency of decentralized leading protocol Aave, is down 1.25% during Thursday’s U.S. market hours to trade at $92.78. While the downtick gained its initial momentum with the broader market slowed, the spillage from Kelp DAO rsETH exploit continued to pressurize AAVE price. The deeper analysis of the technical chart shows an emerging bullish reversal pattern that could push the coin price for a fresh recovery trend.
AAVE Open Interest Surges 52% Despite DeFi Crisis and Liquidity Drain
Since last week, the majority of major cryptocurrencies witnessed notable recovery, in-line with Bitcoin’s price jump above $78,000. The primary catalyst for this surge was de-escalating geopolitical tension following the ceasefire agreement between the U.S., Iran and Israel.
However, the AAVE price detrailed from this recovery following the largest DeFi hack of 2026. On April 18, 2026, the liquid restaking protocol Kelp DAO was subjected to a significant security breach causing the loss of around 116,500 rsETH worth about 292 million dollars. The bridge utilized a “1-of-1” decentralized verifier network (DVN) configuration via LayerZero, allowing the hacker to forge cross-chain messages and mint or release unbacked tokens without real collateral.
The attacker used the unbacked rsETH as a security on Aave to borrow an estimated between $190M-236M of liquid assets such as Wrapped ETH (WETH). This resulted in huge bad debt as the collateral those loans were secured with was virtually worth nothing and the ETH pool utilization by Aave hit 100% and could not be drawn down further.
This contagion led to a liquidity crisis and panic withdrawals of more than $16.2 billion. This withdrawal erased over a third of the total deposits of Aave, reducing its value to about 29.6 billion.
This decline in total deposits indicates a widespread deleveraging of DeFi players who decided to reduce risk and transfer funds to perceived safety beyond the Ethereum restaking ecosystem.
However, the futures contract associated with AAVE recorded a notable spike during this uncertain period. According to Coinglass data, the AAVE’s OI value has bounced from $211 million to $321 million in the last two weeks, registering a 52% surge.
This spike indicates that market participants are still highly interested in building a leverage position in this asset to speculate a potential price move. If the trend continues, the AAVE price could deliver a strong move in near-term.
AAVE Price Holds Key Support of Falling Wedge Pattern
Since last week, the AAVE price plunged from $118.9 to $92.8 current trading value, registering a loss of 21%. Interestingly, this pullback showed a clear bear cycle within the formation of a classic bullish reversal pattern called falling wedge.
The chart setup is characterized by two converging trendlines which typically signal a weakening bearish momentum. If pattern holds true, the AAVE price is likely to rebound from the pattern’s bottom trendline and surge roughly 20% to rechallenge the wedge pattern resistance at $111.
A potential breakout from this barrier will intensify the market buying pressure and push AAVE price towards $131 and $141 ceiling.
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