The price of Aave rose to $88 just two weeks ago, but currently the altcoin is experiencing a correction. In the last 24 hours, Aave is down more than 4% and on the weekly chart it is down more than 7% in value. The technical outlook for Aave appears bearish with both demand and accumulation falling on the overnight chart.
Currently, Aave is hovering near a critical support level, and upcoming trading sessions will be decisive in determining the coin’s direction. Although the price is currently above the crucial support zone, it is facing two major resistance levels that it needs to overcome.
Failure to surpass the immediate resistance could lead to a resurgence in bearish sentiment, potentially pushing the price below the local support level. In addition, Aave’s market cap has declined, indicating a gradual loss of buyer momentum on the daily chart.
Aave Price Analysis: One Day Chart
At the time of writing, the value of the altcoin is at $70, having corrected from the previous high of $88. The coin is encountering resistance levels at $72 and $75.
It is important to note that if the price falls from its current level, sellers may become active. This is due to the presence of a bearish order block, which indicates high sales volume.
Failure to maintain a price above USD 68 could lead Aave to trade near USD 66 and USD 64. However, historically, the $68 price has proven to be a crucial rallying point, as evidenced by the previous rally to $88, which was initiated from the same level.
However, if the coin can hold its price above the $68 level in the coming trading sessions, it may have a 27% rally probability.
Technical Outlook
After the rejection at the $75 level, Aave buyers have faced difficulties in the market. The Relative Strength Index (RSI) also signaled this declining purchasing power as it dipped below the half line.
In addition, the price fell below the 20-Simple Moving Average line, indicating a shift away from buyer-led momentum. To revive buyer interest, Aave would need to break above $72, potentially re-entering the market.
The altcoin showed sell signals in line with declining demand. The Moving Average Convergence Divergence (MACD) was negative and showed red histograms, which are associated with sell signals on the chart.
In addition, the Chaikin Money Flow (CMF), an indicator of capital inflows and outflows, was below the half line, indicating that at the time of writing, capital outflows exceeded inflows. These technical indicators indicate bearish sentiment in the market and possibly lower demand for the altcoin.
Featured image of UnSplash, chart from TradingView.com