This morning, AAVE experienced a significant drop, and the underlying logic is worth examining. According to on-chain data, the second-largest holder sold off 230,000 AAVE (approximately $38 million) between 5:40 AM and 7:05 AM, quickly exchanging it for 227.8 WBTC and 5869.4 stETH. The acquisition cost of these assets was around $223.4, and this was liquidated at an average price of $165, with an expected unrealized loss of $13.45 million.
The chain reaction from this operation has also affected other leading bulls. A major long position on Hyperliquid (address 0x074) has seen its unrealized loss expand to 176%. This long was opened on November 16 at an average price of $189, with a current position size of approximately $1.2 million. The short-term liquidity shock has put significant pressure on these high-leverage positions.
More interesting is the rhythm of changes in market sentiment. The community will vote on an ARFC proposal on Snapshot tomorrow at 10:40, which involves the transfer of brand asset control to token holders—essentially an upgrade in decentralized governance. The market has both expectations and concerns about this: on one hand, it reflects the self-improvement of the DAO, while on the other hand, it diminishes some expectations regarding the future elasticity of brand assets, prompting institutions and large holders to reprice in the short term. Price, governance, and confidence expectations are intertwined this morning.$AAVE
