DeFi Yield Market Momentum Fuels AAVE’s Recovery From 15% Drop

AAVE Bounces Back After 15% Decline as DeFi Yield Markets Gain Traction

Despite ongoing global economic pressures and trade tensions, AAVE has shown notable resilience, recovering from a 15% drop over the past four days thanks to rising momentum in decentralized finance (DeFi) yield markets.

The price climbed from roughly $240 to above $250 as investors increasingly turned to tokenized yield products, which have seen heightened activity from both retail and institutional players.

This uptick in performance comes amid renewed volatility caused by fresh U.S.-China tariff disputes and concerns about trade deal violations, factors that have unsettled many risk assets.

The DeFi sector remains strong overall, with total value locked (TVL) reaching $178.52 billion. AAVE continues to dominate the lending landscape with a TVL of $25.41 billion, underscoring its leadership in the space.

Key Developments

AAVE’s recent rebound is closely tied to its collaboration with Pendle Finance, whose tokenized yield markets quickly reached supply limits, demonstrating robust demand for innovative yield strategies.

Additionally, the Ethereum Foundation recently secured a $2 million loan using Aave’s decentralized stablecoin GHO, backed by ETH collateral, highlighting the protocol’s growing use for institutional financing.

GHO’s overcollateralized structure and interest payments strengthen Aave’s DAO treasury, promoting community governance and sustainability.

According to IntoTheBlock, AAVE has maintained a 45% share of the decentralized lending market from early 2023 through mid-2025, reflecting its steady recovery from previous market downturns.

Technical Overview

Price support solidified near $242.70 during peak trading hours, with significant volumes signaling strong buying interest.

An ascending triangle chart pattern emerged, with higher lows suggesting accumulation even as the token faced resistance near $253.75.

After reaching a high near $256, AAVE consolidated around the $248-$250 range.

Volume spikes accompanied price surges, forming a cup-and-handle pattern indicative of a potential bullish breakout.

Short-term consolidation near $249, combined with growing buying volume, points to possible gains above the $250 resistance.

As DeFi yield markets expand and innovate, AAVE’s integration of new products and firm support zones position it well to navigate macroeconomic headwinds and capitalize on sector growth.