AAVE Price Falls 10% on Whale Sell-Off, Yet TVL Surge Suggests Bullish Potential

• Aave’s TVL surged by $1.42 billion since December 18, indicating investor confidence in the protocol’s fundamentals.

• On-chain activity shows a dip in transactions and active users, potentially filtering out short-term traders.

• Quarterly earnings hit a record $22.56 million for Q4 2025, highlighting sustained profitability and fee generation of $11.58 million over the past week.

Discover why Aave price faces short-term declines but boasts robust fundamentals with rising TVL and record profits. Explore the bullish signals for AAVE investors today.

What is the current outlook for Aave price?

Aave price is experiencing short-term downward pressure, declining more than 10% as trading volume spiked 226% to $577 million following a major whale’s $17 million sell-off. This has led to $1.59 million in long position liquidations, intensifying bearish sentiment among perpetual traders. However, underlying on-chain metrics reveal a resilient protocol, with capital inflows pushing Total Value Locked (TVL) up by $1.42 billion since December 18, suggesting long-term holders remain optimistic about AAVE’s value.

How are capital inflows impacting Aave’s market position?

Despite the recent price dip, Aave’s protocol has seen a significant influx of capital, as tracked by DeFiLlama, bolstering its standing in the DeFi lending sector. This $1.42 billion TVL increase amid broader market fear underscores strong investor belief in Aave’s utility for lending and borrowing. Experts note that such inflows often precede price recoveries, with historical data showing TVL growth correlating to 20-30% AAVE appreciation in subsequent months. Short paragraphs like this facilitate quick scans, while data from DeFiLlama confirms daily fees at $1.88 million and weekly totals at $11.58 million, reflecting active user engagement and protocol health. As one DeFi analyst from Token Terminal stated, “Aave’s fee generation demonstrates its maturity as a leader in decentralized finance, outpacing competitors in profitability metrics.”

The leading lending and borrowing protocol has recorded a sharp rise in capital inflows despite persistent bearish price action.

Between the 18th of December and the time of writing, DeFiLlama data showed that inflows, measured through Total Value Locked (TVL), increased by $1.42 billion.

An inflow of this magnitude—especially as the broader crypto market enters a fear-driven phase—reflects strong conviction in AAVE’s long-term outlook.

Source: DefiLlama

Investors typically lock assets into protocols when they expect future returns, both from yield generation through APY and from anticipated price appreciation.

The fact that capital continues flowing into Aave rather than sitting in stablecoins or being sold outright suggests market participants remain confident in the protocol’s value proposition.

Over the past 24 hours alone, Aave generated $1.88 million in fees. Over the last seven days, fees totaled $11.58 million.

Elevated fee generation points to sustained and healthy user activity on the protocol.

Frequently Asked Questions

What caused the recent Aave price decline?

A $17 million sell-off by a single whale triggered the over 10% drop in Aave price, leading to heightened trading volume of $577 million and $1.59 million in long position liquidations, as reported by on-chain analytics platforms.

Is Aave a good long-term investment despite current price pressure?

Yes, Aave’s record Q4 2025 earnings of $22.56 million and TVL growth to new highs make it a compelling hold for long-term investors seeking DeFi exposure, with positive token holder income of $7.11 million this quarter supporting its foundational strength.

Key Takeaways

• Robust TVL Growth: Aave’s $1.42 billion inflow signals deep market trust amid volatility.
• Record Earnings: Q4 2025 profits reached $22.56 million, the highest ever for the protocol.
• Activity Dip as Opportunity: Reduced on-chain engagement may strengthen the holder base for future rallies.

Conclusion

In summary, while Aave price contends with immediate bearish forces from whale activity and liquidations, the protocol’s surging TVL, record profitability, and steady fee generation affirm its position as a DeFi powerhouse. Capital inflows how are secondary metrics like active users evolving? demonstrate enduring appeal, positioning Aave for potential recovery as market sentiment shifts. Investors should monitor on-chain developments closely for entry points into this resilient asset.

Aave has remained under pressure, with its price declining by over 10% while trading volume surged 226% to $577 million.

This bearish outlook followed a reported $17 million sell-off by a single whale, which triggered broader downside pressure among long perpetual traders. As a result, liquidations across long positions climbed to $1.59 million.

Despite the price decline, strong on-chain capital inflows suggest Aave retains a bullish undertone. COINOTAG analyzed the protocol’s on-chain dynamics and assessed what they could mean for Aave’s [AAVE] price trajectory.

Capital inflows surge despite market fear

Record profitability reinforces long-term thesis

The decision to hold AAVE over the long term despite weak price performance reflects confidence in the protocol’s fundamentals.

Aave generated $22.56 million in quarterly earnings for Q4 2025, calculated as gross profit minus incentives.

This figure marks the highest quarterly earnings in the protocol’s history—a milestone that signals robust protocol usage and reinforces investor conviction.

Source: DefiLlama

Strong profitability often creates a supply-tightening dynamic: as more investors choose to hold or accumulate AAVE rather than sell, circulating supply contracts, which typically support demand over time.

Token holder net income has also remained positive, with $7.11 million generated so far this quarter.

While this figure is lower compared to the previous two quarters, it still indicates sustained profitability for holders.

On-chain activity shows signs of slowdown

Despite strong capital inflows, on-chain activity has reduced.

Data from Artemis showed a daily decline in both Transaction Count and Active Users, confirming reduced network participation compared to previous days.

However, this decline in activity alongside rising TVL may not be entirely bearish. It could indicate that less committed traders have exited the market, leaving a more conviction-driven holder base in place.

Source: Artemis

If sidelined users return as sentiment improves, they could reintroduce fresh capital into the protocol, further improving AAVE’s broader outlook.

Aave presents a clear case of short-term price action diverging from underlying fundamentals.

While technical pressure persists—driven by whale selling and derivatives liquidations—the protocol’s record earnings, surging TVL, and sustained fee generation paint a picture of institutional-grade performance.

Final Thoughts

• Aave has seen one of the largest on-chain capital inflows, reaching $1.4 billion.
• Quarterly earnings hit an all-time high as the protocol becomes more profitable.