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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
AAVE began the year with a strong uptrend that saw it register price gains of 87.5% between early January and mid-February. However, a price rejection at the $92.6 resistance level led to a 34.9% price correction over a two-month period.
Bitcoin’s [BTC] dip under $27k over the past 24 hours could provide the needed boost for bears to take the next support level of $61.4.
Bulls have no response to intense selling pressure
Source: AAVE/USDT on Trading View
AAVE’s bearish momentum saw the price smash through key support levels at $83.7 and $69.4. Bulls were able to rally significantly on the first test of the $69.4 support level. However, subsequent retests saw the support level give way to intense selling pressure.
With the price approaching the critical $61.4 support level, the bulls defense of this level could be short-lived. Furthermore, the bears could be poised to extend the bearish momentum.
Meanwhile, the Relative Strength Index (RSI) remained under the neutral 50 mark, showing a lack of buying pressure. Similarly, the Moving Average Convergence Divergence (MACD) posted a bearish crossover. The MACD line (blue) moved below the signal line (red) and dipped under the zero level. This hinted that bears retained the upper hand in the market.
Two bearish candles on the 12-hour timeframe signaled the intention of bears to take the $61.4 support level. A session close under the support level could see AAVE sink lower with short-selling targets at $57.5 and $51.2 (January swing low).
On the flip side, this downward move will be invalidated if the bulls mount another successful defense of the support level. A bullish session close could signal an influx of sustained buying pressure with bulls aiming to reclaim the $69.4 level in the short-term and the $75 level in the long term.
Shorts hold sway
Source: Coinglass
According to data from Coinglass, market speculators showed extreme caution in the futures market. Although the futures market situation remained low, $254.37k worth of longs were liquidated. This accounted for 93% of total liquidations.
How much are 1,10,100 AAVEs worth today?
The long/short ratio reiterated the shorts’ dominance with a 52.59% advantage in the 24-hour timeframe. This hinted at an increased preference for more AAVE sales in the long term.
Source: Coinglass
