AAVE's Unhappy Hour: Price Dips 4% As Key Partners Show Exit Door

The crypto market took a breather on Thursday, and AAVE felt the pain more than most. The token plunged around 4%, sliding from $95.09 to $90.11, per CoinMarketCap. It now sits with a market cap of roughly $1.38 billion and trades about $285 million daily.

But the price drop isn't the whole story. Aave Labs has been dealing with some housekeeping issues lately - and we don't mean spring cleaning.

Chaos Labs, the risk management crew that held things down for three years, announced plans to bounce in April. Their reason? A "fundamental misalignment" on how to handle risks - plus concerns about the upcoming Aave V4 upgrade. Apparently, there wasn't enough budget or resources to keep the new upgrade safe and sound.

They're not alone. BGD Labs and ACI have also stepped away, citing disagreements about V4's future direction. Some team members were reportedly working hard on V4 while simultaneously dragging the previous V3 version. That's not a great look.

These departures have left questions about who'll handle critical tasks like risk checks moving forward.

On the charts, things aren't exactly comforting. TradingView shows AAVE in bearish territory with a falling trend channel on longer timeframes. The MA5 and MA200 are both confirming the downtrend. The 14-day RSI is hovering around 55 - neutral territory, neither oversold nor overbought.

Immediate support sits around $91, with major resistance at $94-$95. Drop below $86 and $82 becomes the next stop. That said, there's a potential double bottom pattern forming - typically a bullish signal - and the token is currently testing a key resistance zone.

Overall market vibes will determine what happens next.