Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- AAVE price fell below $69 amid severe macro headwinds.
- Range-bound extension on the charts ahead of US Jobs reports.
Aaf [AAVE] suffered more losses from mid-July due to increasing market uncertainty. In particular, macroeconomic headwinds such as shrinking global liquidity and the recent Fitch Ratings’ US credit cut have worried some investors.
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In the same period, AAVE has fallen from $88 to around $63 since mid-July, a loss of >25%. Thereafter, Bitcoin [BTC] also made losses. At the time of writing, BTC was below the low range of $29.5k, likely amplifying the bears’ influence over the weekend.
But July’s US Jobs report, scheduled for August 4, 2023, could bring some volatility over the weekend.
Further weakening after a $69 support breach
Source: AAVE/USDT on TradingView
Higher time frame AAVE charts, especially the H12, weakened further after price action broke a major bullish order block (OB). The previous D1 bullish OB of $66.5 – $71 (cyan) matched the March/April/May support of $68.95 but flipped to a bearish breaker.
The move strengthens the sellers’ lead.
But the extended decline stabilized and consolidated above another bullish OB of $57 – $62 (White). It shows AAVE consolidated losses above the immediately following support level. But according to indicators on the price chart, a solid corrective rebound was still unlikely.
For example, Global Net Liquidity, which tracks the availability of liquid assets in the global financial system, peaked in the first half of July and later declined.
The indicator has yet to improve at the time of writing and could impact capital injections into AAVE, as confirmed by the below-average Chaikin Money Flow (CMF).
In addition, the Relative Strength Index registered a slight improvement but remained in the lower range, further strengthening sellers’ lead around the weekend.
Thus, AAVE could extend its trading range between the bearish breaker ($66.5-$71), cyan and the next support zone ($57-$62), white. Investors can pursue profit by targeting extremes in the range.
The small advantage of the seller
Source: cryptometer
Based on AAVE statistics from Cryptometer, sellers had little visibility into the US jobs report and weekend. In particular, 24-hour sales volume was dominant as of writing at >51.2%, worth $6.5 million.
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In addition, spot volume fell by more than 25% over the same period, which could tip the scale further in favor of short sellers.
AAVE’s futures market statistics were also negative. According to Mint glass, volume and open interest declined by >40% and 8% respectively. Collectively, the above stats reinforce a bearish bias over the weekend.