At the start of 2021, the AAVE protocol had a moment of glory. Indeed, the token of the same name reached highs, with an increase from 95 to 668 dollars. This meteoric and memorable growth has now passed, giving way to a slow and vertiginous fall. But then, will the next few months be as red as the previous ones? In this Wednesday re-analysis, we’re going to take a look at the price of AAVE to try to shed some light on the recent swings.
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AAVE on a key level on a weekly scale?
After an all time high of $668 in May 2021, the price of AAVE has continued to fall. Currently, it is around 100 dollars! Evolving for the moment in a descending wedge, it oscillates between a support and an oblique resistance. Additionally, you can see that the former weekly support zone at $267/$284 is now resistance.
The price is currently back on the lower limit of its descending wedge. It is converging with former weekly resistance at $95. This is an important level that had never been retested in a significant way. Thus, to avoid a continuation of the fall of AAVE, the buyers will have to manifest themselves on this level.
It is important to keep in mind that AAVE can temporarily seek liquidity under this famous support by heading into its upper demand zone. This will be an opportunity to look for stops for people who will be looking for the asset for a long time. In case the price gets there, it will be imperative to have a bullish reaction. Without this, the asset will surely take the direction of its lower demand zone with a return, at least, to 39.2 dollars. Of course, we are not there yet!
A bullish correction coming?
It is important to note that the trend has been clearly bearish for several weeks. Moreover, there is, for the moment, no sign of a bullish reversal. But then, what should we consider for the next few weeks? In addition to taking liquidity in the demand zone, we can envisage an upward correction of the current downtrend. If so, what are the levels to monitor?
With AAVE maintained on its oblique and horizontal support, it will be necessary to monitor a return to the daily supply zone between 141 and 159 dollars. This will undoubtedly be the first area where AAVE will make a stop. In the event that AAVE breaks above $162, there will be a break of the bearish pattern with a new high. This potentially means a short-term bullish reversal in the event of a bottom higher than the previous one.
In this context, it will be possible to see AAVE return to higher levels such as 186 dollars. However, it seems important to me to note that a return to $243 would be overly optimistic. Indeed, the asset is in a bearish configuration on a weekly scale. In the event that AAVE would return to the levels mentioned, it is very likely that it can put an end to its bullish correction. Thus, it would subsequently return to lower price levels.
Here we are at the end of the analysis of AAVE, an asset that is in a downtrend on a weekly and daily scale. In a fairly turbulent context in the cryptocurrency market, it is more than ever necessary to be careful. On this asset, it is possible to witness an upward correction, if the market allows it, up to the levels mentioned in the analysis. However, if the former resistance at $95 fails to operate as support, you should be prepared for a continuation of the downtrend the asset is currently in.
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