In early 2021 was AAVE protocol had a moment of glory. In fact, the token of the same name reached heights with an increase from 95 to 668 dollars. This meteoric and memorable growth is now over and leaves room for a slow and dizzying fall. But will the next few months be as red as the previous ones? In this Wednesday’s reanalysis, we’ll take a look at the price of AAVE to try and shed some light on recent fluctuations.
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AAVE at a key level on a weekly scale?
After a record high of $ 668 in May 2021, the price of AAVE continues to fall. At the moment it’s about $ 100! Currently developing in a descending wedge, oscillating between a support and an inclined resistance. Additionally, you can see that the previous weekly support zone of $ 267 / $ 284 is now resistance.
The price is currently back at the lower limit of its falling wedge. It converges with previous weekly resistance of $ 95. This is an important level that had never been retested in a significant way. Thus, in order to avoid a continuation of AAVE’s decline, buyers will have to manifest themselves at this level.
It is important to keep in mind that AAVE may temporarily seek liquidity under this famous support by entering its upper demand zone. This will be an opportunity to look for stops for people who will be looking for the asset for a long time. In case the price gets there, it will be imperative to have a bullish reaction. Otherwise, the asset will definitely take the direction of its lower demand zone with a return of at least $ 39.2. Of course we are not there yet!
Is there a bullish correction?
It is important to note that the trend has been clearly bearish for several weeks. Moreover, there is currently no sign of a bullish reversal. But what should we consider in the next few weeks? In addition to taking liquidity in the demand zone, we can imagine an upward correction of the current downward trend. If so, what levels need to be monitored?
With AAVE maintained on its sloping 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 will stop. In the event that AAVE breaks above $ 162, there will be a break in the bearish pattern with a new high. This potentially means a short-term bullish reversal in case of a bottom higher than the previous one.
In this context, it will be possible to see AAVE return to higher levels such as $ 186. However, it seems to me important to note that a return of $ 243 would be far too optimistic. In fact, the asset is in a bearish configuration on a weekly scale. In the event that AAVE would return to the mentioned levels, it is very likely that it can put an end to its bullish correction. It would then return to lower price levels.
Here we are at the end of the analysis of AAVE, an asset that is in a downtrend on a weekly and daily scale. IN a rather turbulent context in the cryptocurrency market, it is more than ever necessary to be careful. On this asset, it is possible to see an upward correction, if the market allows it, up to the levels mentioned in the analysis. However, if the previous resistance of $ 95 does not act as support, you should be prepared for a continuation of the downward trend the asset is in at the moment.
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