AAVE bulls can seek re-entry here

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• AAVE reversed from $88 and lost hold of $80.
• Long positions were discouraged over the weekend.

AAVE briefly cleared the Q2 2023 high of $84 and graced a new high of $88. The upswing followed the buoyant bullish sentiment after Ripple Labs’ landmark ruling and win. But the hype quickly subsided over the weekend (15/16 July), exposing AAVE to short-term sell pressure. 

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In the same period, Bitcoin [BTC] inflicted a “fake-out” on its $30k – $31.5k range, gracing a new high of $31.8k. But the king coin registered sharp losses and eased to $30.3k at the time of writing. 

Can AAVE reclaim $80?

Source: AAVE/USDT on TradingView

AAVE reclaimed all the lost ground in May and June. However, an attempt to stay above the Q2 price ceiling of $84 was futile. When zoomed out on the daily timeframe, the Q2 high was also a confluence area with a bearish order block of $79.5 – $84.3 (red). 

So, bulls faltered at the above roadblock and resistance as sellers sought re-entry. There are two key levels of interest that sellers could target. 

First, the zone of $74 – $76 (white), a recent higher low. Secondly, the key price reaction level of $68.8 – $71.9 (cyan). The former could offer a more likely chance of buying opportunities because it aligns with the ascending trendline support. The bearish OB, near $84, will be the likely bullish target. 

But a breach below the ascending trendline support will invalidate the bullish thesis. Such a move could expose AAVE to an aggressive sell-off towards the $65 and $60. 

In the meantime, the On Balance Volume has risen since late June, denoting increased demand in the same period. But the Relative Strength Index eased to the neutral level. Bulls could be confident of leverage if RSI doesn’t drop below 50. 

Longs discouraged

Source: Coinglass

Read AAVE Price Prediction 2023-24 

According to Coinglass liquidation data on 16 July, AAVE saw more wreckage of long positions than short positions. In particular, longs suffered about $96k of liquidations, while shorts saw less than $20k.

It underscores the intensified sell-pressure and bearish sentiment over the weekend. Bulls can wait for clearer market direction and BTC price action on 17 July for better-optimized set-ups.