Aave is a decentralized financial protocol (DeFi), and according to Milk Road’s recent blog post, it has seen a $500 million revenue increase since 2024.
Aave is now ranked as the highest revenue-generating protocol in the DeFi market.
AAVE’s price has fallen since the middle of September, in spite of its success.
The AAVE has fallen by 14% over the past two weeks
CoinGecko’s data shows that the AAVE has fallen by more than 14% in the last two weeks, and around 4% during the month.
Aave’s trend has been bullish since the start of the year, despite the slight decline in April.
On September 23, 2024 the token reached a high of $177.42, a level not seen in two years. It then began to decline almost instantly.
Investors and market watchers should understand the reasons behind this decline in price, especially given the large revenue generated by the Aave platform decentralized lending so far this calendar year.
The Aave Network Activity Declines
The decline in the network’s activity is one of the main reasons behind the drop in prices.
Aave has seen its revenue soar, but metrics related to engagement with users have revealed a worrying trend.
In September, the number of daily active addresses, an important indicator for user engagement, spiked. However, it began to fall after that.
This drop in users is directly related to the decrease in transaction volume, which could indicate a loss in interest in or engagement with this platform.
It is common for a reduction in activity on a network to lead to gloomy sentiments, because it indicates that users are using the protocol less.
The birth to death ratio within the Aave eco-system has also declined.
The ratio is the difference between new and inactive addresses.
The declining ratio of births to deaths indicates that new users have been entering the ecosystem, while older users could be losing their interest.
The token price can be negatively affected by this perception.
Increased selling pressure
The increasing pressure on Aave to sell is another significant factor that impacts the price.
Santiment data shows a dramatic increase in AAVE supply at exchanges and a decrease in AAVE supply outside of exchanges.
The trend indicates that investors actively sell their holdings in response to changes in market sentiment and conditions.
As the selling interest overwhelms that of buyers, price corrections are common.
Aave’s market sentiment has also become notably negative. Investor enthusiasm can wane, and the general sentiment may shift. This could lead to a decrease in demand for tokens.
The sentiment metrics show that Aave is a subject of increasing negative emotions, which further exacerbates the challenges facing the protocol in terms of price.
Fear of possible losses leads many investors to sell their positions and accelerate the price decline.
Aave Price Rebound: Can it be achieved?
AAVE is still losing value despite its impressive $500 million revenue. This decline in price can be attributed to several factors, including decreased network activity, increasing selling pressure and changing market sentiment.
Aave’s investors have a small glimmer hope despite the challenges.
Token recently reached a critical support level of $135. If sustained, this could indicate a possible bullish reversal.
The price of the token may recover and grow if buying pressure and investor confidence increase.
This article Aave prices have dropped since mid-September, despite $500M in revenue. Here’s why first appeared on The ICD
