Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer
- AAVE has retested the July support at $68.
- Demand on the futures market has improved since mid-September.
The long-term market recovery at the end of September turned upside down Aaf [AAVE] to hit the top two DeFi protocols as the total value locked (TVL) improved. In terms of price performance, AAVE’s second recovery leg reached +20%, peaking at $72.4 before experiencing a slight pullback at the time of writing.
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A week ago, AMBCrypto was optimistic on AAVE after it retreated to $60 and predicted it could reach $65. The projection was validated and a long recovery could occur Bitcoin [BTC] continues to rise.
Will recovery take longer?
Source: AAVE/USDT on TradingView
At the time of writing, AAVE has voided a voided daily bullish order block (OB) range of $66.45 – $70.7 (red) and retested a July support zone. If BTC doesn’t post immediate losses, AAVE bulls could defend the support zone.
If so, the third phase of recovery from July support could push AAVE towards the $75 and $80 levels. Such a prolonged recovery could yield modest gains if AAVE is bought at support levels.
But a decline below the support zone will make the higher time frame market structure bearish. So a drop below $66.45 would negate the bullish bias. But a liquidity chase below the support level could not be overruled.
Meanwhile, the Relative Strength Index (RSI) and the Chaikin Money Flow (CMF) were positive at the time of writing, but the downward trend saw some easing of buying pressure and capital inflows. Therefore, tracking BTC movements is crucial for optimized settings.
AAVE demand recovered in September
Source: Coinglass
According to Coinglass, AAVE’s open interest rates improved in the second half of September. This shows that demand for AAVE has recovered in the derivatives market over the same period and peaked in October.
How many 1,10,100 AAVEs worth todayyou?
however, the metric was down 8% at the time of writing, suggesting near-term bearish pressure. Thus, monitoring BTC price action is critical for risk mitigation.