The governance token of DeFi lender Aave gained over 2% early Wednesday, climbing above $220 after recovering from initial losses tied to a new community proposal for a $50 million token buyback initiative.
This movement followed a turbulent trading session where prices fluctuated more than 10% within a $22.55 intraday span, with AAVE sharply recovering from a low of $214.25, according to CoinDesk Research’s analysis model. The token also experienced a 23.68% increase in trading volume compared to the weekly average. Nevertheless, despite the recovery, it remained 5% lower than Tuesday’s peak.
While this uptick reflected a slight rebound in the broader crypto market from overnight lows, it also aligned with a fresh governance proposal that could significantly alter AAVE’s long-term economic framework.
The Aave Chan Initiative (ACI), led by Marc Zeller, introduced on Wednesday a permanent $50 million annual buyback program funded by the lending protocol’s revenues. This plan would extend Aave’s existing buyback initiative, allowing for flexible weekly purchases of AAVE ranging from $250,000 to $1.75 million based on market conditions.
Supporters of the program argued that it would generate consistent buying pressure, utilize idle treasury assets, and stabilize the token’s market behavior. It is viewed as a significant move toward institutionalizing “Aavenomics” as a fundamental aspect of the protocol’s long-term economic model.
Technical analysis
Key technical indicators suggest consolidation for AAVE, as indicated by CoinDesk Research’s model. AAVE currently encounters near-term resistance at $236.80, with support situated between $215 and $220. Price trends may remain range-bound unless governance factors or macro trends generate increased demand.
- Support/Resistance: Key support is in the $215-217 range, while resistance is at $236.80; newly formed near-term support at $220 following volume increase.
- Volume Analysis: 24-hour volume surged 23.68% over the seven-day average, peaking at 128,661 units on October 22 at 11:00 AM, representing a 124% increase above the 24-hour Simple Moving Average.
- Chart Patterns: Range-bound consolidation within a $22.55 trading range (10.1% volatility), demonstrating a sharp intraday reversal from a low of $214.25.
- Targets & Risk/Reward: Immediate resistance present at the $236.80 level, with support convergence around the $215-220 range offering defined risk parameters for managing positions.
Disclaimer: Some parts of this article were created with the assistance of AI tools and reviewed by our editorial team to ensure accuracy and compliance with our standards. For detailed information, refer to CoinDesk’s complete AI Policy.
