• Aave has started buying back AAVE from the market on a weekly basis, reducing supply.
• Investors in the market have followed suit, accumulating AAVE as they consider the development positive.

Aave [AAVE] registered a 1.11% uptick over the past 24 hours, trailing slightly behind its 2.91% gain for the week.

This 24-hour growth follows Aave’s recent implementation of a token buyback system, which could drive the asset into a rally.

Market participants are moving in response to this development as they acquire the token. However, will this be sufficient to overturn its 20% drawdown from the past month?

What does the buyback mean for AAVE?

The Aave team has set aside an annual budget of $50 million to buy back AAVE from the market, with a weekly spend of $1 million to achieve this goal.

This new development reflects a change in the fee structure and is expected to act as a catalyst for price growth.

Between the 9th of April and press time, 10,014 AAVE worth $1.39 million had been purchased from the market under this initiative.

Moreover, the buyback pool may expand further, depending on protocol revenue during this cycle. This approach, by design, achieves two things — instills investor confidence and potentially triggers a supply squeeze.

Having said that, the market didn’t wait long to respond. Accumulation picked up, hinting at expectations of a rally.

Accumulation has surged in the market

There’s been a growing accumulation in the market, likely to lead to a price breakout.

Over the past week, $13.98 million worth of AAVE changed hands — $4.30 million of that in the last 24 hours alone.

This accumulation is noteworthy, as these AAVE tokens purchased from the spot market are being held for long-term commitment and moved into private wallets.

The 4-hour chart provides better insight, confirming that investors are accumulating the asset as it trades within a symmetrical triangle pattern made of converging support and resistance levels, with price oscillating within it.

Finally, a breach of the upper resistance line would imply the start of a price rally. If a breakout occurs, the price target lies between $170 and $187.

Also, stronger market momentum could push the asset back to the $200 region.

Liquidity growth remains high

The market reaction isn’t limited to accumulation and storage in private wallets. A cohort of investors has moved their AAVE into the protocol, becoming liquidity providers.

This influx has propelled the Total Value Locked (TVL) to $18.029 billion — its highest since early April. A growing TVL often implies rising confidence and deeper market roots — both of which support price continuation.

In recent weeks, Aave has focused on several developments aimed at attracting liquidity. Two of the most notable are competitive yields on EUR and the potential launch on Aptos.