AAVE Price Bounces as Aave Shrugs Off Binance Hack Freeze

• AAVE price is recovering after a sharp drop briefly took it below its long-term moving average.
• Aave lifted a precautionary freeze on its V3 and V4 markets after Binance’s hot wallet breach.
• Nine assets, including the two largest stablecoins, still cannot back new loans on Aave.
• Buyers still have to clear a resistance band overhead before the October downtrend can be called over.

AAVE traded at $134.97 on Saturday, up 4.5% on the day on Binance and extending a rebound that started after Aave reopened all of its lending markets on October 30. The protocol had frozen new deposits and borrows across its V3 and V4 deployments for about 16 hours after attackers drained roughly $6.3 billion from Binance’s hot wallets and an address tied to the theft used Aave to borrow ETH against stolen USDT. Aave’s own contracts were never compromised, although the sell-off around the incident briefly pushed the token below a key long-term average before buyers stepped back in.

AAVE Reclaims Its 200-Day Average

The selling that followed the Binance breach took AAVE below $120 on the daily chart, under both the 200-day exponential moving average (EMA) at $126.63 and the 0.5 Fibonacci retracement at $122.60. That second level marks the halfway point of the rally from the June low of $57.83 to the October high of $187.36. Neither break held, as the token closed back above both lines within a day, and Saturday’s gain has carried it to within about 2% of the next barrier at $137.88. Part of the drop came from the attacker, who held AAVE among other governance tokens and was selling them for ETH according to LlamaRisk, the risk manager funded by the Aave DAO, which is why AAVE lost about 9% in the first hours while Bitcoin and Ether fell roughly 4%.

Most traders treat the 200-day line as the boundary between a market that is correcting inside an uptrend and one that has turned lower, so the fast recovery above it matters more than the size of the bounce. The longer-term setup also still leans positive. AAVE’s 50-day EMA crossed above the 200-day in late August in what traders call a golden cross, and the two averages have not crossed back since.

The difficulty lies overhead. The 50-day EMA, now at $143.84, has started to slope lower as the October decline feeds into it, and together with the 0.382 retracement at $137.88 it forms a band of about $6 where the price stalled in late October before the latest drop.

Momentum Turns Up From Near-Oversold

The 14-day relative strength index (RSI) dipped to about 30 during the sell-off, the zone where selling usually starts to look exhausted, and has since recovered to 42.21. It has also moved back above its own average at 39.20, which typically signals that downside momentum is fading. A reading below 50 still means sellers have controlled more of the past two weeks than buyers, and a push above that mark alongside a daily close above $137.88 would be the first real confirmation of a turn. Trading volume jumped on the Binance-driven drop, and the rebound sessions have not matched it yet.

A close above $137.88 would put the $143.84 to $156.79 area in focus. A rejection there would bring $126.63 and $122.60 back into play, and a daily close under $122.60 would leave the 0.618 retracement at $107.31 as the next major support.

Why Aave Froze 292 Reserves in Two Hours

Binance says its hot wallets, the internet-connected wallets an exchange uses for day-to-day withdrawals, were compromised at around 20:05 UTC on October 29, with losses of roughly $6.3 billion across ten blockchains. Blockchain analytics firm TRM Labs puts the total at $6.36 billion and attributes the attack with high confidence to TraderTraitor, a North Korean state hacking unit. The exchange’s early investigation pointed to a compromised laptop belonging to a DevOps engineer, the kind of employee who manages software deployment and internal IT systems.

An address linked to the theft quickly turned to Aave, depositing about 60 million USDT as collateral and borrowing 19,762 ETH, worth around $44.6 million at the time. Aave froze every DAO-operated market on V3 and V4 at 21:42 UTC, less than two hours after the breach, covering 175 reserves on 16 networks and another 117 on four V4 networks. New deposits and borrows stopped while withdrawals and repayments carried on, and only the Horizon market for tokenized real-world assets stayed open.

LlamaRisk laid out the reasoning in a governance forum update. The attacker could swap stolen funds into any token listed on Aave and post it as collateral to borrow other assets, while cutting supply and borrow caps instead would have needed a governance vote and around five days to reverse. The exploiter’s existing position held $59.9 million of USDT collateral against $43.8 million of debt and stayed open to normal liquidation, so LlamaRisk said Aave depositors were never at risk.

Aave’s caution also traces back to April, when a forged cross-chain message let attackers create 116,500 rsETH from Kelp DAO, worth about $292 million, and post it on Aave as collateral to borrow liquid assets. More than 30% of Aave’s deposits left within four days, and LlamaRisk estimated the resulting bad debt at between $123.7 million and $230.1 million. In June, LlamaRisk proposed a stricter risk framework that includes automatic cuts to an asset’s loan-to-value ratio once risk thresholds are breached.

Nine Assets Still Barred as Collateral

Aave confirmed on X that all markets were unfrozen by 13:57 UTC on October 30, with its guardians reopening them in four waves. Nine assets remain at a zero loan-to-value ratio on V3 and a zero collateral factor on V4: USDT, USDC, USDT0, POL, WAVAX, sAVAX, XAUT, PAXG and OP, along with their bridged and wrapped versions. Users can still supply them and earn interest, although those deposits add no new borrowing power.

Update following the Binance incident:

All markets are now unfrozen across Aave V3 and V4.

They were frozen as a precaution after initial reports, which paused new deposits and borrows while withdrawals and repayments continued as normal.

Aave contracts were unaffected by the…

— Aave (@aave) October 30, 2026

The restrictions had a cost. According to LlamaRisk, the parameter changes removed $3.7 billion of unused borrowing capacity on V3 and $130 million on V4, while utilization in the main stablecoin pools climbed to between 92% and 100%. Utilization shows how much of a pool is lent out, and near 100% it means depositors may have to wait for repayments before withdrawing. Borrowing costs would normally spike at that point, so LlamaRisk temporarily capped variable borrow rates on stablecoins at 10% a year even at full utilization.

The next signal for AAVE holders is when the nine restricted assets return to normal parameters. After the April exploit, LlamaRisk recommended restoring WETH loan-to-value ratios on six V3 instances in May, and only once set recovery milestones had been met. More than $3 billion of the Binance loot is still beyond the reach of freezes, and the Bitcoin Fear & Greed Index has fallen to 30, its lowest reading since August. Under those conditions, a staged restoration looks more likely than a quick reset.