During the last two weeks, AAVE gained over 25% and is one of the top crypto gainers in June. However, based on our technical analysis, we believe the token has the potential for another 25% upswing toward $80. This article will explain why this is the case and how a potential trade setup can look.
AAVE — Current Status
AAVE trades at $62.93, marking a 6.22% change in 24 hours. Following a period of downturn where the price dipped to oversold levels near the $50 support mark, AAVE has managed a notable rebound. This bounce propelled the price above the $65 resistance mark and past the 200-day moving average, propelled by a surge in trading volumes. However, this surge appears to be short-lived as the price failed to maintain these levels, possibly due to short-sellers covering their positions.
The current setup leaves AAVE in a precarious position, caught between the need to pull back near the $50 support for another swing entry and the necessity to break above the $70 resistance mark (which also marks the 200-day moving average) to signal a reversal to an uptrend. The potential upside in case of a successful reversal is speculated to be around $80.
AAVE — Technical Indicators
Technical indicators serve as critical tools for understanding the underlying trends in asset prices. In the case of AAVE, the trends based on moving averages suggest a mix of movements. As indicated by the Simple Moving Average (SMA), the short-term uptrend indicates a recent bullish momentum. However, the medium and long-term trends show a downtrend, signaling that AAVE has struggled to maintain its price over an extended period.
The Relative Strength Index (RSI), a momentum indicator that measures the magnitude of recent price changes, is currently neutral for AAVE. This indicates that the asset is neither overbought nor oversold and is presently balanced.
The Moving Average Convergence Divergence (MACD), another momentum-based indicator, appears bullish for AAVE. This suggests that the price could be upward momentum, pointing to potential buying opportunities.
The Ultimate Oscillator, which helps identify market extremes, is also bullish, reinforcing the positive momentum suggested by the MACD.
Finally, the Average Directional Index (ADX), an indicator that measures the strength of a trend, is strong for AAVE. This implies that the current upward or downward trend is robust and likely to persist.
Trade Setup & Outlook: Navigating the Tides
Given the current indicators, the short-term outlook for AAVE remains positive. The bullish momentum indicated by the MACD and the oscillator point towards a potential upside in the near future. However, this outlook is not without its contingencies.
For a bullish trend to hold, AAVE must pull back to the $50 support level or break back above the $70 resistance mark. In the event of a successful breach of the resistance, the upside potential is around the $80 mark. However, the medium and long-term downtrends indicate that investors should exercise caution and closely monitor AAVE’s price movements.
In summary, AAVE is in a tug-of-war between bearish and bullish forces. While the short-term outlook looks promising, with various indicators showing bullish momentum, the medium, and long-term downtrends cannot be overlooked. The future direction of AAVE’s price hinges on whether it can pull back to the $50 support or successfully breach the $70 resistance mark, which could pave the way for a potential ascent to the $80 level.
As an integral player in the DeFi space, AAVE’s journey holds significant implications for the broader crypto market. Therefore, careful monitoring and prudent decision-making will be key for those navigating the unpredictable currents of AAVE’s market movements.
AAVE, an open-source and non-custodial protocol, has been making waves in the DeFi space. It enables users to earn interest on deposits and borrow assets in a trustless manner, thereby promoting financial inclusion and advancing the decentralized finance revolution. AAVE token holders also have governance rights, which allows them to participate in the protocol’s decision-making process. AAVE’s innovative features and user-centric approach have earned it a prominent position in the ever-evolving DeFi landscape.