AAVE crypto flashes sell signal – 27% price correction on the way?

• A popular analyst noted a sell signal for AAVE that could result in an average of 27% price drop.
• On-chain metrics showed that the asset is overvalued.

Aave [AAVE] saw a high volume of buying from whales recently. Lookonchain

One whale, in particular, has bought AAVE worth $10.4 million in under a day.

This accumulation trend among addresses was a positive sign for AAVE. Yet, the price saw a rejection from the $140 resistance zone that marked the local top back in March.

A deep retracement is likely

Source: Ali on X

Crypto analyst Ali Martinez posted on X (formerly Twitter) that the TD Sequential flashed a sell signal on the AAVE daily chart. This has seen a 27% drop on average.

If such a correction plays out, Aave would drop to the $100 mark.

Source: AAVE/USDT on TradingView

The daily timeframe showed a strong bullish structure and momentum. The OBV also made a new high to indicate significant buy volume behind the rally.

However, despite all the positive signs, AAVE crypto still stopped at the $140 resistance zone that marked the March highs.

Based on the July rally, a set of Fibonacci levels had been plotted. They showed that $142.58 was also the 100% extension of that move, reinforcing the strength of the resistance here.

AAVE’s mixed signals, explained

Source: Santiment

The 30-day MVRV was the highest it has been since early March. Short-term holders were at a profit, which could lead to selling pressure. The mean coin age has lacked a consistent trend over the past month.

Realistic or not, here’s AAVE’s market cap in BTC’s terms

On the other hand, the falling mean dollar invested age was a huge positive. It signals increased token circulation and new investments and is a bullish signal.

Therefore, a retracement toward $105-$115 followed by a rally appeared likely for Aave.