AAVE whale holds the ground: After a loss of $3.33M, still spends $1.57M to increase positions, what is the signal behind contrarian accumulation

According to the latest news, a whale of AAVE recently spent 501 ETH (approximately $1.57M) to purchase 9,157 AAVE tokens at a price of $171.4 each. This purchase is quite notable because the whale currently holds an unrealized loss of $3.33M. What signals might this behavior of increasing positions while in a loss state convey?

Whale’s Position Overview

The whale (address: 0xddc4eab490469f073ab8cd5937b1a0f585687931) has accumulated a total of 78,074 AAVE, worth approximately $16.75M. From a cost basis perspective, its average acquisition cost is $214.5, while the current market price is about $170.69, indicating an overall unrealized loss of nearly 20%.

Logic Behind Contrarian Buying

Reflection of Dollar-Cost Averaging Strategy

The whale is adding to its position within the $170.69–$171.4 price range, effectively implementing a dollar-cost averaging approach. Although this will increase short-term losses, from a long-term perspective, it prepares for a future price rebound. Such behavior is often observed among institutional investors who have a clear outlook on the asset’s long-term value.

Passive Compensation via Staking Rewards

It’s worth noting that the whale has earned 463.48 AAVE in staking rewards, roughly valued at $79K. While this passive income is relatively small compared to the loss amount, it can help buffer some of the holding pressure. In the AAVE ecosystem, staking not only yields rewards but also allows participation in protocol governance, which may be an important consideration for the whale’s long-term holding strategy.

Possible Signal of Market Bottom

Looking at the market environment, AAVE has fallen 10.97% over the past 30 days but has risen 5.24% in the last 24 hours, indicating a short-term rebound. Large holders increasing their positions at this point often suggest they believe the current price is approaching a cyclical bottom. Such contrarian buying behavior by institutional players often carries forward-looking signals.

Market Impact Assessment

As a leading DeFi project, AAVE ranks 35th by market cap, with a 24-hour trading volume of $377 million. A single purchase of $1.57M may not significantly move the price in the overall market, but the continuous accumulation by whales could influence market sentiment. Especially when multiple large holders show similar buying intentions, it can attract more follow-on capital.

Summary

This whale’s behavior demonstrates several key features: first, continuing to buy while in a loss indicates confidence in AAVE’s long-term value; second, earning passive income through staking suggests a long-term holding approach rather than short-term speculation; third, buying during a short-term market rebound may signal optimism about future trends. From a market perspective, contrarian accumulation by institutional players is often a noteworthy signal. While it should not be used as a direct buy signal, it helps us understand the true sentiment of market participants. Moving forward, it will be important to watch whether AAVE can break through the $214.5 average cost level, which will determine if this whale’s position can eventually become profitable.