How are traders reacting to whales’ $62M altcoin purchase?

• On-chain metrics suggested short-sellers could fuel selling pressure
• The $343 and $365-levels represented areas of selling pressure for AAVE’s price

Waves of significant market volatility have seen many crypto assets move significantly in either direction almost at random. In this context, Aave (AAVE) has been gaining significant attention from long-term holders, investors, and whales. Especially as they appear to be accumulating the token now. 

Million worth of AAVE’s accumulation

According to popular crypto expert Ali’s latest post on X (formerly Twitter), crypto whales purchased $62 million worth of AAVE tokens in the last three days alone. In addition to this accumulation, a blockchain-based transaction tracker, Lookonchain, also revealed that a single whale accumulated 11,663 AAVE – Worth $3.93 million.

Looking at these numbers, it would seem that this could be an ideal opportunity to buy AAVE tokens.

Traders’ bearish bets

Besides the whales’ recent activity, intraday traders seem to be taking advantage of the present market sentiment as they are strongly betting on the short side.

In fact, Coinglass’s data revealed that bulls are over-leveraged at the $316, $312, and $300-levels, where they have held over $7.90 million worth of long positions. Conversely, short-sellers are over-leveraged at the $320, $327, $340, and $345-levels, where they have held $21.33 million worth of short positions.

Source: Coinglass

These findings suggested that short-sellers are strongly dominating the asset. Hence, they might have the potential to cause selling pressure and fuel further bouts of price depreciation.

Despite significant accumulation by whales and investors, the token’s price has been struggling to gain momentum due to the wider market’s sentiment. Particularly because major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have been moving sideways for a prolonged period.

At the time of writing, AAVE was trading near $320 following a very modest price hike of 0.45% in the last 24 hours. However, during the same period, it has attracted significant attention from traders and investors too. This resulted in a 70% hike in trading volume, especially when compared to the previous day.

Technical analysis and key levels

According to AMBCrypto’s analysis, AAVE has been moving in a parallel channel pattern between $384 and $285 for the past three months. Based on its latest price action and prevailing market sentiment, AAVE might be moving towards the support level of $285 now. 

Source: TradingView

Despite a bearish market outlook, AAVE, at the time of writing, was still trading above the 200 Exponential Moving Average (EMA) on the daily time frame. This indicated that the asset is still on an uptrend for now. 

Additionally, according to one crypto expert, on-chain data revealed that the $343 and $365-levels represent areas of selling pressure, or the supply zone, which are currently acting as barriers. A breakout beyond these barriers could propel AAVE significantly on the charts.