- Aave price has witnessed a drop of around 4%, forcing its value to drop below $91 with a market capitalization of $1.38 billion.
- The drop in the cryptocurrency came amid internal matters after core developers and team members stepped away from the project.
- According to technical indicators, the cryptocurrency is forming a falling trend channel on the long-term timeframes, which suggests more downward pressure on the cryptocurrency.
While the bullish momentum is slowly fading away, the majority of altcoins have witnessed a small drop on Thursday.
Following this downward trend, one of the leading cryptocurrencies, AAVE, saw its price plunge by around 4%, declining its value from $95.09 to $90.11, according to CoinMarketCap. The cryptocurrency currently holds a market capitalization of around $1.38 billion with a daily trading volume of around $285 million.
Internal Issues at Aave Labs Spark Debate Over Management
In the last few months, Aave Labs, the main entity behind the protocol, has been facing internal issues as many important partners have left the coalition.
In April, Chaos Labs announced its plan to exit the platform after saying that there was a “fundamental misalignment” in how to manage risks. It was responsible for risk management for the last 3 years. Not just this, they have clearly raised questions on the upcoming Aave V4 upgrade.
🧵I wouldn’t be surprised if $AAVE keeps dropping 👇
Honestly, I’ve never seen a crypto project sustain long-term when the founder gets too greedy. They only need a fair share of a big pie, enough to stay motivated while the whole ecosystem grows together. But instead, they try… https://t.co/3Nf6bHDapY pic.twitter.com/TbMMf1N7pt
— Tanaka (@Tanaka_L2) April 7, 2026
According to Chaos Labs, there was not enough budget and resources available to ensure the safety of the new upgrade.
Not just this, there are other groups like BGD Labs and ACI who have also stepped away from the platform after citing disagreements in the future planning of V4. Some team members were saying that the entity was working so hard on V4. At the same time, they have criticized the previous V3 version.
These back-to-back departures have created a lot of pressure on the team and raised some serious questions about who will manage the important tasks in the absence of previous partners, including risk checks. Such a situation in the protocol might create instability for the protocol.
Technical Indicators Suggest Bearish Pattern
According to TradingView, the cryptocurrency is currently in bearish mode. The chart is currently creating a falling trend channel on the long-term timeframes. According to the experts, this pattern suggests a further downside until the upper boundary of the pattern is cleared.
(Source: TradingView)
Popular indicators are also giving a strong signal right now. The majority of moving averages, including MA5 and MA200, are confirming the downward trend.
The 14-Day Relative Strength Index is currently revolving around 55, which means that the cryptocurrency is in neutral territory without being either oversold or overbought.
There is immediate support at around $91 and major resistance at around $94 to $95. If the AAVE price falls below $86, it could open the door towards the $82 levels. While oversold readings may spark a small bounce. However, this is completely dependent on the overall cryptocurrency market.
On the price chart, Aave has created a potential double bottom pattern. This pattern is mostly considered a bullish signal for traders. The token is now testing the red resistance zone. If the AAVE price falls below this level, there will be more downfall in the cryptocurrency. On the flip side, if the cryptocurrency manages to resist this downfall and hold above the red resistance zone, it might see some rebound.
Also Read: HBAR Price Falls 3.5% Despite ETF Support as Market Sentiment Weakens
