Crypto nugget: AAVE is about to lose $100?

At the beginning of 2021, the AAVE protocol had a moment of glory. Indeed, the token of the same name reached all-time highs, rising from $95 to $668. This rapid and momentous growth is now over, giving way to a slow and dizzying fall. But will the coming months be just as red as the last? In this re-analysis from Wednesday, we’re going to look at the price of AAVE to try and shed some light on its recent swings.

This analysis of the AAVE is presented to you in collaboration with the Coin Trading and Its Algorithmic Trading Solution finally accessible to private persons

AAVE at a major level on a weekly scale?

Price of AAVE against the dollar (1W)

After hitting a record high of $668 in May 2021, AAVE’s price has continued to fall. Currently it is about 100 dollars! It evolves into a falling wedge for the moment, oscillating between a support and an oblique resistance. In addition, you can see that the former $267 / $284 weekly support zone is now resistance.

The price is currently back at the lower end of its falling wedge. It is converging with the previous weekly resistance at $95. This is an important level that has never been retested in any significant way. Thus, to avoid a continuation of the fall of AAVE, the buyers will have to manifest themselves at this level.

It is important to keep in mind that AAVE may temporarily seek liquidity below this famous support by moving into the upper demand zone. This will be an opportunity to find stops for people who are looking for the asset for a long time. If the price gets there, it is necessary to have a bullish reaction. Otherwise, the asset is sure to head towards its lower demand zone with returns of at least $39.2. Of course we’re not there yet!

Will there be a bullish correction?

AAVE cryptocurrency price against the dollar on a daily basis
Price of AAVE against the dollar (1D)

It is important to note that the trend has been clearly bearish for several weeks now. In addition, there is no sign of a bullish reversal for the time being. But what should we think about in the coming weeks? In addition to taking liquidity in the demand zone, we may consider an upward correction from the current downtrend. If so, what levels should be monitored?

With AAVE held on its oblique and horizontal support, it will be necessary to monitor a return to the daily supply zone between $141 and $159. This will undoubtedly be the first area where AAVE makes a stop. In the event that AAVE moves above $162, the bearish pattern will break with a new high. This may signify a near-term bullish reversal in the event of a bottom higher than the previous one.

In this context, it will be possible to see AAVE back to higher levels, such as $186. However, it seems important to me to note that a return to $243 would be too optimistic. Indeed, the asset is in a bearish configuration on a weekly scale. In the event that AAVE were to return to the said levels, it is highly likely that it could end its bullish correction. It would then revert to lower price levels.

Here we come to the end of the analysis of AAVE, an asset that is in a weekly and daily downward trend. In quite a turbulent context in the cryptocurrency market, it is more necessary than ever to be careful. On this asset it is possible to witness an upward correction, if the market allows it, to the levels mentioned in the analysis. However, if the former $95 resistance fails to act as a support, be prepared for a continuation of the downtrend the asset is currently in.

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