AAVE Price Dips on WLFI Rumor, but Bullish Indicators Point to 24% Surge

Key Insights:

• AAVE price slid nearly 8% intraday on WLFI token rumors but closed only 1% lower, showing resilience.
• Net outflows of $1.64 million and a positive Chaikin Money Flow confirmed that traders were buying the dip.
• Fibonacci levels place the next AAVE price target near $430, a potential 24% upside from $347.

The AAVE price had a strong run this past week, notching gains of about 18%. But the last 24 hours were different.

A rumor spread about World Liberty Financial (WLFI), sparking fear and driving the AAVE price down by nearly 8% intraday. It slid from around $385 to $339 before rebounding.

By the end of the move, the AAVE price was down about 1% for the day. The rebound showed that the drop was less about fundamentals and more about panic.

WLFI Panic Weighed on AAVE Price

The sharp move came after claims surfaced that AaveDao would receive 7% of WLFI’s token supply. Some calculated that to be worth nearly $3 billion.

Traders sold quickly, worried about the implications. Soon after, the WLFI team told WuBlockchain the story was “false and fake news.” AAVE founder Stani Kulechov even leaned into the drama, calling it the “art of the deal” on social media.

WLFI stands for World Liberty Financial. It’s a brand-new crypto project backed by members of the Trump family and other investors.

WLFI is not a token you can trade yet; it’s a governance token, which means it gives holders the right to vote on protocol decisions. At launch, 20% of its 100 billion token supply was set to unlock on September 1, with the rest coming later by community vote.

The reaction was short-lived. Once the WLFI denial circulated, the AAVE price recovered above $340.

While the rumor created panic, the rebound showed how quickly traders stepped back in. Usually, rumors like this can hit the price of an asset pretty hard. In AAVE’s case, bears couldn’t come in, all thanks to the powerful technical setup.

Buyers Backed the AAVE Price Drop

Exchange flows told a clearer story. On August 25, AAVE price sat near $347 while net outflows came in around $1.64 million.

Outflows mean tokens left exchanges, often moved into wallets. This suggested that holders were buying the dip rather than selling into weakness.

It is worth noting that the outflow pillar wasn’t as high as the previous day. This shows that some selling strength was there. However, the sellers were impactful enough to change the netflow direction.

The Chaikin Money Flow (CMF), which measures how much capital enters or exits, stayed above zero. A reading above zero signals that inflows are stronger than outflows. Even as AAVE price pulled back, CMF’s positive stance confirmed that demand was intact.

The Bull-Bear Power (BBP) chart added another layer. BBP remained in the green through the drop. A green reading means bulls held the edge, and the rumor did not shift that balance. Together, these signs showed that the panic was not concrete.

Technical Levels Hold Firm for AAVE Price

Charts reinforced the idea that the correction was temporary. A Fibonacci extension placed $340 near a key retracement level of $334. Holding this zone was critical for confirming support.

From here, the next technical target for AAVE price sits near $430, a level that aligns with the 1.618 extension. Moving from $347 to $430 would represent gains of about 24%.

If strength continues, higher extensions point to $470 and $500 as potential areas, but traders will first watch $430 as the test.

However, to realize the $430 target, the most critical price levels for AAVE include $371. While this is all about the bullish case, an AAVE price dip of under $311 can quickly invalidate that, turning the structure bearish in the short term.

The WLFI rumor shook confidence, but the damage did not last. Net outflows, positive CMF, and a steady BBP all showed that buying interest stayed strong. Rather than breaking the uptrend, the dip allowed new entries at lower prices.

If AAVE price keeps holding above the $340 support and flows remain negative on exchanges, the next move higher could push toward $430. The short panic over WLFI was purely sentimental, not a signal of weakness.