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AAVE headed toward a three-year support zone; will buyers invest?

2min Read

The daily chart saw a bearish structure emerge after AAVE fell below the $68.7 level on 31 July and this bearish bias remained unbroken thus far

AAVE headed toward a three-year support zone that buyers would be keen on

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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.

  • The selling volume behind AAVE was not indicative of potent bearish pressure in August, which meant a rally was not unreasonable
  • The price action showed that the structure and momentum favored the sellers across multiple timeframes

Aave [AAVE] has been in a downtrend on the weekly chart since June 2021. This June, the price saw a rally from $49 to $88- but it wasn’t enough to shift the higher timeframe downtrend. However, there could be another such rally later this year.

Read Aave’s [AAVE] Price Prediction 2023-24

The $50 psychological level has served as support since November 2020. There have been days where the selling activity was so great that AAVE temporarily reached the $44-$45 mark, but it has rebounded in the past. Here’s what investors can wait for before looking to buy the token.

A move to the $50 area could yield a good risk-to-reward buying opportunity

AAVE headed toward a three-year support zone that buyers would be keen on

Source: AAVE/USDT on TradingView

The daily chart saw a bearish structure emerge after AAVE fell below the $68.7 level on 31 July. This bearish bias remained unbroken, with the recent lower high at $69.5. The RSI agreed with the structure as it was unable to climb past the neutral 50 level. To the south, the $50 level coincided with a bullish order block from 15 June that was highlighted by the cyan box.

When AAVE retested this demand zone on 17 August, it saw a positive reaction. The lower timeframe charts such as 4-hour showed a bullish structure developed in the past week. However, the $61.5-$64.8 area represented a strong resistance zone.

A high probability buying opportunity would arise if AAVE falls to the $40-$50 area. This might not materialize soon, for the OBV has remained relatively flat over the past two months despite the downtrend. Hence, AAVE buyers could be justified in being more aggressive and looking to enter in the $52-$55 area as the selling pressure was not intense.

The target would be the recent lower at $69.56, with the July high at $88 a far more ambitious target.

Active addresses have trended downward since July as prices slid lower

AAVE headed toward a three-year support zone that buyers would be keen on

Source: Santiment

The mean coin age trended upward in the past two months to signal network-wide accumulation. Combined with the OBV, it suggested that long-term holders did not possess bearish conviction. The development activity has been on the rise as well.

How much are 1, 10, or 100 AAVE worth today?

The drop in active addresses was a concern as it showed a smaller crowd interacting with and speculating upon the asset. This suggested bullish expectations were in decline. The active deposits metric did not see a large spike in the past week. It generally coincides with powerful waves of selling pressure and was something to keep a close eye on.


Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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