AAVE drops 6.41% in 24 hours as DeFi landscape evolves and infrastructure initiatives become central

As of NOV 3 2025,

experienced a 6.41% decline over the past 24 hours, falling to $216.9. Over the previous week, AAVE decreased by 4.87%, saw a 5.21% drop in the past month, and has fallen 29.88% over the last year.

Aave (AAVE) appears to be regaining traction as capital in the DeFi sector returns to lending protocols, underscoring its essential position within decentralized finance. Although the token recently fell 6.41% in a single day, the overall sentiment remains positive due to ongoing infrastructure developments. The DeFi industry is increasingly prioritizing platforms that deliver scalable and effective financial solutions, with Aave emerging as a central figure in this evolution.

Market indicators point to a complex outlook for Aave. Despite the recent sharp decline, analysts are evaluating its performance against broader DeFi movements. Experts note that Aave’s foundational status as a lending protocol could offer resilience in a market known for its fluctuations. Forthcoming enhancements to Aave’s credit delegation system and the GHO stablecoin are expected to boost user engagement and growth, which may impact its price direction in the near future.

Backtest Hypothesis

To assess how the market typically reacts after significant Aave price corrections, a backtest was performed on all occasions since 2022 when Aave dropped by 10% or more in a single day. The analysis reviewed returns over the subsequent 30 days. Out of 36 such events, the average return by day 30 was around -0.5%, showing no meaningful outperformance versus simply holding the asset.

The success rate for trades following these sharp declines hovered near 50%, with a slight increase on the 9th and 10th days after the drop. However, there was no persistent pattern of excess returns, and recoveries were inconsistent, lacking a clear trend in volatility or bounce-back. These results indicate that past steep declines in Aave have not consistently led to strong short-term recoveries, so investors should be cautious about viewing such drops as reliable trading opportunities.