After a promising start to the year, AAVE suffered a setback as it encountered resistance at the $92 level, resulting in a 34% correction over a two-month period. The recent blow to the crypto market caused by the SEC suing Binance has further impacted the altcoin’s performance.
In the past 24 hours, AAVE has lost 3% of its value and on the weekly chart, the coin has seen a significant drop of almost 12%. Technical indicators point to the presence of significant bearish pressure, with both demand and accumulation declining.
With Bitcoin also experiencing a decline towards the USD 25,000 zone, most altcoins showed similar price action. AAVE has struggled to keep its price above a critical support level, and as selling pressure has mounted, it has fallen below that level. AAVE’s market cap has also fallen, indicating that sellers are in control of price at this point.
Aave Price Analysis: One Day Chart
At the time of writing, Aave is trading at $61. The bulls encountered resistance at the $62 level as the broader market showed signs of weakness in recent days. The altcoin resistance levels are $61.30 and $62.80.
If the price moves above $62.80, it could potentially reach the $65 price level. However, the bears have been exerting influence, which may lead Aave to approach its support line at $59.
If it fails to stay above this support, the coin could drop to $57 and possibly even $51, serving as a short-selling target for traders. Trading volume for Aave in the last session has remained low, indicating a lack of strong buying pressure.
Technical analysis
Aave faces challenges in generating demand, as shown in the chart. The Relative Strength Index (RSI) indicates that there are more sellers than buyers in the market, with the RSI staying below the half line.
To maintain purchasing power, the price must surpass overhead resistance levels. In addition, Aave has fallen below the 20-Simple Moving Average line, suggesting that sellers have boosted price momentum in the market. These factors indicate the prevailing bearish sentiment surrounding Aave’s performance.
Aave confirms bearish sentiment on the chart and generated sell signals on the overnight chart, in line with other indicators. The Moving Average Convergence Divergence (MACD), illustrating price momentum and potential reversals, has formed red histograms, indicating sell signals for the altcoin.
The Bollinger Bands, which measure price volatility and fluctuations, have largely remained parallel with a slight divergence. This suggests that the price of the altcoin may show slight fluctuations during the upcoming trading sessions.
Featured image of Figma, charts from TradingView.com