While downward pressure on the cryptocurrency market shows no sign of letting up, a notable market “whale” has made the decision to signal an otherwise bearish outlook on two major DeFi tokens—Lido (LDO) and Aave (AAVE).
This particular whale, a big holder of crypto assets, has sold off in total $5.98 million worth of these two assets over the last seven hours. This action seems more pronounced when taking into consideration that the broader market is moving down right now. If a whale is starting to sell off certain assets, then it stands to reason that they might think we are in store for further losses in those assets over the short term.
A Whale’s Strategy: Selling LDO and AAVE
In the past few hours, whale 0xa36 has made a move that could foreshadow further decline for two tokens. The whale has liquidated a massive amount of LDO and AAVE, approximately 2.726 million and 8,250 tokens, respectively. The way in which they did it—using Coinbase Prime and CoW Protocol, probably to minimize price impact—suggests it was a well-planned event. The amount of tokens sold and the way they were sold highlight a significant decision by the whale to substantially reduce their position in these two tokens.
The sale’s timing is especially remarkable since the larger market has seen a downturn, with many alternative coins suffering sharp price drops. LDO and AAVE have both recently felt the impact of the downturn and seen substantial drops in their values relative to their recent highs. Lido’s LDO token, for example, has been trending downwards in price, and the whale’s decision to sell seems like it must reflect some kind of concern about the future direction of its price.
History of Whale’s Accumulation and Current Holdings
To grasp the complete context of this whale’s decision, one should examine their earlier accumulation strategy. Between September 24 and November 7, 2024, the whale picked up a big portion of their LDO holdings—3.851 million LDO tokens—at a very average price of $1.292. The tokens set the whale back to the tune of about $4.98 million. The strategy at that time looked like a great accumulation of a low-priced asset with potential upside.
A similar large investment was also made in AAVE by the whale. On January 9, 2025, the whale bought 20,302 AAVE tokens at an average price of $289.8, which brought the total to around $5.88 million. The investment seems to indicate the whale’s confidence in AAVE as a leading DeFi platform and in the token’s potential as a growth asset.
As it stands now, the whale’s portfolio is offering mixed results. It still holds 1.125 million LDO tokens, currently worth about $1.56 million. This position has generated a profit of approximately $715,000, which represents a return of around 14.3% since the tokens were acquired. However, the whale’s AAVE holdings are in the red. It holds 12,051 AAVE tokens, currently valued at about $2.48 million, or a loss of $1.52 million (around -25.8%) from the original purchase price.
The choice to divest much of these assets indicates that the whale is attempting to minimize losses and secure profits wherever feasible while trimming its holdings in underperforming tokens. This could be a more significant market trend, where large players are rebundling their portfolios and bracing for what some analysts predict could be an extra leg down for the market.
Market Trends and Whale Behavior
The price of individual tokens can be affected a great deal by whales because they hold so many tokens and are capable of moving the market. Whales can sometimes even be seen as the main indicators of market sentiment. So when a whale decides to dump LDO and AAVE, it suggests a not-so-sunny outlook for these tokens in the near term. It also could be seen as a sign that more and more investors are settling on DeFi tokens as the next dowdy sector in crypto.
The virtual currency market has been highly unstable, with numerous tokens undergoing intense price swings. While a few DeFi projects have bucked this trend, many others—Lido and Aave among them—have been dragged down by the generally bearish market. The decision by one whale to start a fire sale on its DeFi holdings may reflect a lack of confidence in the imminent recovery of the crypto market, given some seriously adverse trends in the macro economy.
The Future of LDO and AAVE
The key issue now is what is in store for LDO and AAVE. Both tokens are core to DeFi, with Lido’s liquid staking solution and Aave’s lending and borrowing protocol being among the pillars of the ecosystem. Yet, even being major DeFi tokens doesn’t seem to have sheltered them from price declines in what has otherwise been a pretty bearish crypto market of late.
Lido’s LDO token may continue to feel the heat as the market takes stock of Ethereum’s staking model, not least because of the recent unveiling of Ethereum’s staking withdrawal feature. Elsewhere, Aave, our pick for the largest decentralized lending platform, may also endure a rough market as lenders in general deal with a high-volatility environment and a very fresh batch of shifting interest rates.
The whale’s choice to sell off some of its assets might give other investors a sign that it’s time to head for the exits. As the market continues to confront a variety of problems—inflation, rising interest rates, and the specter of recession—it’s more than likely that traders and large institutional players will keep being skittish and recalibrating their portfolios to take reduce high-stakes risks.
Conclusion
The recent sale of LDO and AAVE worth $5.98 million by whale 0xa36 highlights the cautious sentiment that currently prevails in the cryptocurrency market. While this whale has made a profit earlier with LDO, their decision to reduce exposure to both LDO and AAVE signals that this player in the market thinks these tokens are not safe to hold during the current crypto climate. As whale moves certainly can be, this decision likely serves as a good lesson in to what not to do when managing risk in a highly speculative investment. However, keep in mind that no move is guaranteed to provide profits or protect against losses.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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Image Source: wedninth/123RF // Image Effects by Colorcinch
