AAVE price at risk of correction as exchange supply rises, whales shed AAVE holdings

AAVE price declined in the past week and a further correction is likely, according to on-chain metrics. Two key metrics, the supply of AAVE on exchange wallets and the Network Realized Profit/Loss metric paints a bearish picture for the DeFi token. 

AAVE price is $84.46, at the time of writing.

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AAVE on-chain metrics point at likely correction in the token

AAVE Supply on Exchanges has climbed from 3.66 million on January 28 to 3.89 million on Friday. This is a significant increase in the DeFi token’s supply on exchange wallets. Typically an increase in supply is considered bearish for an asset since it increases selling pressure on the token. 

In previous instances, a massive spike in exchange supply of AAVE within a short time has foreshadowed a correction in the DeFi token. 

Supply on Exchanges. Source: Santiment 

Another key metric is Network Realized Profit/Loss, which identifies the net profit/loss of all tokens transacted on a particular day. AAVE holders have realized losses since January 31. When combined with whale transactions valued at $100,000 and higher, it completes the picture. Large wallet investors realized losses on their AAVE holdings in the past three days. 

Whale transactions and Network Realized Profit/Loss. Source: Santiment 

Network Growth is a metric that tracks the relevance of a token among market participants. A decline in Network Growth has typically been an indicator of an impending correction in the asset’s price. AAVE’s Network Growth declined between December 28 and February 1. The steep decrease is indicative that a correction is likely in the DeFi token. 

Network Growth and price. Source: Santiment 

At the time of writing, AAVE price has increased slightly by 0.64%, on the day.