Aave's Supply Narrative Gets Boost as Whale Accumulation and Burn Mechanism Emerge
Aave's protocol revenue has reached a significant milestone of $3 billion. As part of its buyback program, the protocol purchases AAVE tokens from the market and retains them within the DAO ecosystem.
Recently, the founder Stani Kulechov announced that the protocol is considering burning some of these acquired tokens. This potential development has strengthened the supply narrative for AAVE.
Large market participants have also been accumulating AAVE, introducing a direct demand separate from the buyback mechanism. However, exchange reserve data shows that more AAVE-denominated value is moving into exchange reserves, potentially increasing selling pressure in case token holders decide to distribute their tokens.
On the technical front, AAVE has faced resistance at $165.98 but remains above its rising trendline and a crucial support region of $141.48. Buyers still retain an advantage, and a breakout above $165.98 could send AAVE towards $180.