AAVE Price Trapped in Compression Zone Ahead of Critical Support Test

AAVE is trading at $87.74, down nearly 1% on the day and sitting below its major moving averages. This has led to a compression zone in the market, with smart money positioning overwhelmingly long but price pinned beneath every major moving average.

The broader crypto complex has been grinding sideways as macro liquidity conditions remain in flux, with Bitcoin correlation keeping DeFi blue-chips anchored. Right now, BTC's failure to decisively break above its key resistance levels is bleeding directly into AAVE's price structure.

According to Jessie A Ellis, a significant rotation of capital from Layer-1/meme tokens back toward protocol-level assets with real revenue has been underway. Aave's lending dominance makes it a prime beneficiary when this rotation accelerates.