Whales Accumulate AAVE as Retail Flees Amid KelpDAO Exploit Fallout

Aave (AAVE) showed signs of large-scale accumulation even as the protocol grappled with the aftermath of a major exploit that triggered sharp outflows and price declines.

The activity follows an April 18 exploit of KelpDAO’s rsETH bridge. That incident reportedly left Aave with roughly $196 million in bad debt.

Whale Activity Rises as AAVE Faces Fallout From KelpDAO Exploit

The KelpDAO incident has rattled market confidence across the Decentralized Finance (DeFi) sector. Data from DeFiLlama shows that Aave’s Total Value Locked dropped from $26.39 billion to $15.6 billion, marking a decline of over $10 billion.

On-chain flows show depositors rotating from Aave into rival lending protocol Spark. Spark’s TVL has climbed by over $880 million to $4.7 billion during the same window.

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Aave TVL Decline. Source: DeFiLlama

Despite the drawdown, market structure signals point to a notable shift beneath the surface. A key metric, Spot Average Order Size, which measures the average size of executed spot trades, has begun to climb.

“Elevated readings in the ‘Big Whale Orders’ category indicate outsized participation from deep-pocketed buyers, investors who don’t react to noise, but position through it,” analyst Moreno wrote.

The analyst noted that previously, every major cluster of elevated whale spot orders has coincided with a local or market bottom in AAVE. Similar patterns were observed during the 2022 bear-market lows, the mid-2023 consolidation phases, and subsequent corrections through 2024 and early 2025.

While these phases did not always mark immediate reversals, they consistently aligned with zones where “asymmetric risk/reward setups emerged.”

In addition, sentiment metrics now read at their worst levels since the 2022 bear market. Thus, social sentiment data points to peak fear.

“Right now, with AAVE trading in the $90–$100 range and fear metrics near their highest readings since the 2022 bear market, whale order size is spiking again, annotated with a “?” on the chart because the outcome is still open. Historically, this is precisely when the smart money has acted. The pattern doesn’t guarantee a bottom, but it demands attention,” the analyst added.

However, the outcome remains uncertain. The trajectory of AAVE will likely depend on how the protocol addresses the estimated $196 million deficit and whether large-order activity persists in the $85–$95 range. A sustained cluster of elevated trade sizes would more closely resemble prior accumulation phases.

For now, the market reflects a divergence: retail-driven outflows amid early indications of strategic positioning by larger players.

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