Aave’s [AAVE] market performance has been outstanding recently. It has surged by 32.08% in the past month, outstripping many other tokens. This positive trend extends over the weekly timeframe as well, with a gain of 16.42%.

Despite these strong gains, emerging data suggest that AAVE’s rally will likely slow, potentially leading to a significant drop in its trading value.

Tading at $145.80 at press time, AAVE was just $14.21 shy of its earlier high of $160.01. AMBCrypto’s analysis revealed that AAVE’s recent rally was triggered by its rebound from the midline of a major support level at $138.16.

However, AAVE has encountered a four-hour resistance level at $146.69, which coincides with a high selling pressure that could potentially drive the price lower, possibly back to or below the support range between $140.06 and $136.12.

Should the support level break, AAVE’s price could likely decline further, potentially falling as low as $123.18, especially with intensified selling pressure.

An increase in exchange supply suggests that market participants are listing their AAVE assets for sale, indicating a potential surplus.

This surge in supply coincided with a positive shift in Exchange Netflow, meaning investors are likely moving their AAVE to exchanges either to sell or swap for other tokens, resulting in a demand squeeze.

This uptick in supply and exchange flows has contributed to significant long liquidations, as reported by Coinglass. In the past 24 hours, $260.55k worth of AAVE long positions were forcibly closed as market conditions turned unfavorable.

Furthermore, the bearish sentiment is reflected by a decline in open interest, which tracks the volume of unsettled derivative transactions.

Open interest in AAVE has decreased to $164.56 million from $214.71 million as of September 11, signaling reduced liquidity inflow into the market and a potential further decrease in asset prices, possibly reaching $140.06 or lower.#BTC☀ #AAVE #BinanceMegadrop $BTC $AAVE