AAVE Rallies 13.5% After Buyback Proposal and V4 Upgrade Plans Despite Falling TVL
AAVE jumped about 13.5% to $192.8 on Dec. 3 after breaking out of a descending channel, signalling a potential bullish reversal despite weakening on-chain activity. Key on-chain metrics show total value locked (TVL) fell from a yearly high of $76.49B to roughly $54.2B, while weekly protocol revenue dropped from $4.34M in October to $1.76M last week. Technical indicators — MACD turning up and the Aroon Up at 100% — support the breakout, with a measured upside target near $250 (around 30% above current levels) aligned with a 50% Fibonacci retracement and the channel breakout target. Fundamental catalysts include an AAVE DAO proposal for a $50M annual token buyback to reduce circulating supply, the forthcoming V4 protocol upgrade aimed at capital-efficiency and UX improvements, and plans to expand onto Mantle L2. Broader market optimism, led by Bitcoin’s rebound after commentary on a proposed SEC “innovation exemption,” also aided demand. Risks remain: declining TVL and revenue point to weaker user engagement, and prior whale selling since the August highs could pressure sentiment. Trading implication: short-term traders can target the breakout and the ~$250 level with tight risk management; longer-term holders should monitor V4 progress, buyback implementation, and TVL/revenue trends to judge sustainability.
Bullish
The combined news is net bullish for AAVE’s price in the short-to-medium term. Technical breakout from a descending channel, MACD uptick and Aroon Up at 100% indicate strong technical momentum and a plausible measured target near $250. Fundamental catalysts — a $50M annual DAO buyback proposal, the anticipated V4 upgrade (capital-efficiency and UX improvements), and L2 expansion to Mantle — provide tangible demand-side and product improvements that could support price appreciation and reduce supply pressure if implemented. Broad market tailwinds from Bitcoin and regulatory optimism further improve buying conditions. Offsetting factors that limit conviction include meaningful declines in TVL and weekly revenue, signaling weaker user engagement, and historical whale selling since August which could re-emerge. For traders, the setup favors tactical long trades on the breakout with disciplined stops; for investors, the news improves the narrative but requires confirmation via V4 delivery, buyback execution, and stabilization or recovery in TVL/revenue to justify a sustained bull case.