Aave surges 30% in 4 days: A sustained rally past $300 needs…
A price drop toward the $285 zone, just above the former range high, would offer an attractive buying opportunity.
- Aave continued its uptrend after a 3-week range formation.
- The token rallied 30% and counting after retesting the range low on the 6th of June.
Aave [AAVE] managed to break out of its short-term range formation. In an earlier report, it was noted that the steady buying pressure suggested a bullish outlook for Aave.
Soon after, the low of the range at $240 was tested, followed by a 30% rally over four days.
At the time of writing, AAVE was trading at $313. The $320 and $332 levels were imminent resistances to the altcoin.
A retracement toward $300 or the former range high at $280 could present a buying opportunity for swing traders.
How Aave can rally past $300
Based on the rally from $125 to $399 in November-December 2024, a set of Fibonacci retracement levels was plotted. After retracing all the gains made back then, by April, Aave began to trend higher.
It forced a bullish market structure break on the 1-day timeframe on the 8th of May, and has continued to trend higher since.
The range formation gave the token time to reset its momentum and build liquidity around the extremes of the range.
A swift breakout came on Monday after a retest of the $240 support. Bitcoin [BTC] rallied from $105.5k to $110.5k on Monday, which helped AAVE bulls’ cause.
The OBV showed steady demand, and the RSI showed bullish momentum without a bearish divergence.
The 1-month heatmap highlighted the buildup of liquidation levels around the extremes of the range, at $240 and just above $280.
Over the past couple of days, AAVE raced toward the $280 magnetic zone and was able to surpass it easily.
Zooming in on the 3-day heatmap, we can see that the move higher stalled for a few hours at the $290 mark. This gave time for short liquidations to expand in the $295-$300 region, and was taken out too.
At press time, the $320 and $305 were the short-term magnetic zones. Aave traders can watch out for a range formation.
A price drop toward the $285 zone, just above the former range high, would offer an attractive buying opportunity.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
