Why AAVE Traders Must Watch $113 Support Level Following Binance Hack

Aave Retraces Following Multi-Month DeFi Surge

Between June and September, decentralized finance heavyweight Aave ($AAVE) mounted a massive market rally, climbing 214.2% from a low of $60 to a local peak of $188. However, momentum has stalled significantly following that multi-month high. The altcoin has since retraced by 32.9%, sliding downward to trade near $125.8 as market dynamics turn increasingly volatile.

On the weekly timeframe, the broader trend has shifted bearish. Despite this structural weakness, optimistic market participants hold some hope that the current retracement could ultimately pivot toward a price target range of $213 to $240. Achieving that upside trajectory remains conditional on price defense: the weekly session must avoid closing below the crucial $113.4 threshold to keep bullish long-term hopes viable.

Technical Breakdown: Support Levels and Order Blocks Under Pressure

Daily chart indicators are warning market participants to maintain caution. The critical $140 support zone has been breached, leaving technical indicators on the daily timeframe firmly bearish. While the immediate swing structure has remained just barely bullish, several key technical buffers have failed to hold up against intensifying market-wide selling.

Notably, the fair value gap situated near the 78.6% Fibonacci retracement level at $129 was breached during the descent. Price action has now moved to test the bullish order block anchored around $115. If broader market weakness persists, Aave’s underlying price structure is highly likely to experience a full bearish shift. Consequently, swing traders are advised to wait for definitive signs of demand—such as substantial trading volume or a decisive recovery move back above $120—before initiating long positions.

Why This Matters

The technical decline in $AAVE coincides with critical fundamental pressures within the wider decentralized finance ecosystem. In response to the recent Binance heist, Aave moved defensively to freeze its v3 and v4 markets. While this security measure was effective in containing potential fallout, the freeze introduced notable selling pressure on the DeFi governance token and adjacent digital assets.

With an atmosphere of fear gripping participants, entering long positions carries heightened risk. Until structural clarity returns and the market demonstrates an ability to protect the $113.4 to $115 support zone, swing traders and investors are facing an environment where the prevailing trend works against aggressive bullish exposure.

Frequently Asked Questions

What price level must Aave hold to keep long-term bullish targets alive?

Aave needs to prevent its weekly trading session from closing below $113.4. Defending this level keeps the possibility of a longer-term rebound toward the $213–$240 zone intact.

Why did Aave freeze its v3 and v4 markets?

Aave froze its v3 and v4 lending markets as an effective security response to mitigate risks arising from the Binance heist, though the decision spurred notable market fear and selling pressure on the token.

What technical confirmation should traders look for before going long?

Because the daily indicators remain firmly bearish, traders are watching for clear proof of buy-side demand, such as heavy trading volume or a sustained price recovery back above the $120 mark, before considering long trades.