Highlights
- A proposed $52 million annual buyback program aims to remove over 270,000 tokens from circulation, potentially enhancing value.
- On-chain data shows strong activity, with $857.02 million in transactions over $100,000 in the past week, reflecting ongoing interest.
- Also, the 72% of AAVE holders have maintained their positions for over a year, indicating confidence in the token’s long-term potential.
The AAVE price has remained relatively muted despite significant developments surrounding the protocol.
Over the past few years, AAVE crypto has emerged as one of the leading DeFi platforms and after a strong 2024 movement. The Q1 2025, has brought exciting news, of a potential token buyback and an upcoming approval for a major tokenomics overhaul.
However, despite the good news the AAVE price continues its struggle to gain momentum, largely due to the broader downturn in the crypto market, which has hit altcoins particularly hard.
Seen on AAVE price daily chart, it is evident that from a high of $400 in Q4 2024, AAVE price has seen a steep decline. It has dropped 42% over the last 90 days and 22% in the past month.
Currently, AAVE price is consolidating at a high-volume support block, which is crucial on the daily and weekly timeframe. If this support level fails, the next significant support lies around $120.
Yet, given that AAVE crypto is holding at a previously tested volume profile level, there is a strong possibility that an uptrend could emerge from this point, especially if bullish forces come into play.
Furthermore, the long-term buyback plan for AAVE could add an additional layer of optimism and support for the token’s future performance. Keep reading to know more.
Token BuyBack The Next Big Evolution For AAVE Crypto
According to a recent post by Sumcap Research on X, the proposed AAVEnomics plan outlines a promising growth strategy for the AAVE token, centered around a $52 million annual buyback program.
This initiative aims to allocate $1 million each week to repurchase AAVE crypto tokens, effectively removing approximately 270,000 tokens from circulation each year. This makes over 3% of the total supply, based on an estimated round number token price of $180.
The X post emphasizes that Aave’s approach differs from other protocols that often dilute token holders through new emissions. Instead, Aave’s strategy focuses on rewarding existing holders by reducing the overall supply, which could potentially enhance the AAVE price.
The belief is that, over time, Aave’s buybacks may surpass token distributions, creating a more favorable environment for investors.
In short, Aave’s buyback plan has the potential to increase the value and appeal of the AAVE token by decreasing supply and making staking more attractive for holders.
What Does the Weekly AAVE Price Chart Highlight?
Analyzing the price chart on Coinbase, it’s evident that AAVE price has moved past the extreme undervaluation stage that followed the major crash from its 2021 peak of $663 to a low of $47.
However, the recovery from Q3 2023 to Q4 2024 has been impressive. On November 11th, AAVE price broke through the $165 resistance level, which subsequently became a high-volume profile level, propelling the price to $400 by December 16th.
During this ascent, it successfully overcame additional resistance levels at $190, $241, and $341 in Q4 2024 run, fueled by Donald Trump’s glamourous win.
Currently, on both the daily and weekly timeframes, AAVE price is finding support at this critical high-volume profile level of $165. If bullish conditions materialize, this support could generate upward momentum.
A rebound from this level could potentially drive AAVE crypto back to retest its all-time high of $663. However, if the price falls below this support block, it may drop to around $120 or further downwards, which highlights the importance of maintaining this key support level.
Onchain Data Shows Optimism For AAVE Price
Furthremore, the on-chain data indicates a robust level of activity for AAVE crypto, with a significant volume of transactions exceeding $100,000, totaling $857.02 million in the past week. This strong transaction activity reflects continued interest in AAVE, even amid its current price challenges.
Meanwhile, the time-held composition shows that 72% of AAVE holders have kept their positions for over a year, underscoring their confidence in the long-term potential of the token.
Additionally, the financial data further reveals that nearly 50% of addresses holding AAVE are currently in profit, while only 44% are at a loss. The remaining 6% of addresses are at breakeven, indicating a relatively stable sentiment among investors despite the price fluctuations.
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
Mahsa Rezaei is a forward-thinking crypto journalist based in Tehran with a strong background in computer science and finance. Specializing in blockchain technology and its impact on Iran’s economic reforms, her investigative articles and in-depth analyses are widely read by tech enthusiasts and policy makers alike.