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Ave Labs has unveiled a new government initiative that could shape the future direction of one of the most prominent lending protocols in the cryptocurrency sector.
Although on paper the developments looked like a healthy initiative, the price of AAVE did not reflect this for the behavior of investors.
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AAVE launches a new governance model
The proposal is called “Aave Will Win”, and calls on the Aave Community (DAO) to support a comprehensive roadmap centered around the V4 upgrade. If approved, V4 will form the core infrastructure for the next phase of the protocol, establishing a framework that will allow 100% of the revenue generated by products developed by Aife Laboratories to be transferred directly to the DAO.
The AAVE price remains under pressure despite the launch of the new governance model. The symbol is currently in an oversold zone according to the Money Flow Index (MFI). Recent readings suggest that selling pressures resulting from macroeconomic conditions may have picked up after several sessions of sustained flows.
Historically, the price is refunded GHOST After entering excessive sales conditions. Oversold signals often indicate oversold sales as buyers gradually begin to intervene. However, the broader fragility of the cryptocurrency market and investor caution make this scenario less clear than previous recoveries.
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AAVE holders are still on sale
Data on the change in net positions in the exchanges indicate that selling pressures continue to prevail. Net flows to exchanges indicate that holders are… Transferring AAVE to trading platforms. This behavior usually reflects an intention to sell rather than hoard.
The strength of ongoing flows and inflows to exchanges can delay any potential recovery. Even positive developments in the protocol failed to strengthen the bullish momentum immediately. Market participants appeared to be focusing on liquidity conditions and risk appetite rather than government updates.
AAVE price maintains support
AAVE is trading at $111 at press time, maintaining a 23.6% Fibonacci level above $109. This level is widely considered a bearish support level in the market. Maintaining this support is crucial to prevent deeper structural weakness.
Mixed technical signals suggest that AAVE may consolidate above $109 in the near term. The price may be in a lower range below the resistance of $119 while the momentum stabilizes. However, if a break below $109 is confirmed, AAVE could be exposed towards $100 or less.
If selling pressure subsides and investors regain confidence, AAVE could bounce back from $109. A move above $119 indicates an improvement in sentiment. A break above $128 may open the way towards $136, refuting the prevailing bearish outlook.
