Connect with us
Active Currencies 14281
Market Cap $2,484,591,246,070.90
Bitcoin Share 51.96%
24h Market Cap Change $-0.79

AAVE investors should be cautious about this patterned breakout

2min Read
AAVE investors should be cautious about this patterned breakout

Share this article

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

  • AAVE chalked up a bearish pennant chart pattern
  • AAVE holders still suffering losses since the market crash

After Bitcoin [BTC] flipped resistance at $16.5K into support, AAVE also converted $58.1 into support in the intraday session. 

At press time, AAVE was trading at $59.5, up by about 3% in the last 24 hours. The king coin also recorded gains, setting AAVE up for a possible breakout from its 2-week bearish pennant pattern.  


Read AAVE’s Price Prediction 2023-24


Given the unfolding story on the impact of Genesis’s FTX exposure, any bearish BTC sentiment will send AAVE further below the $57-support level.  

AAVE chalks a bearish pennant – A bloodbath in waiting?

Source: AAVE/USDT, TradingView

The recent market crash caused AAVE to fall from its November ATH at $98. The recent rallies ended with lower highs with the same lower lows, resulting in a bearish pennant pattern. Bearish pennant patterns are trend continuation patterns so, a further drop in AAVE prices is likely in the next few days. 

The RSI has been moving sideways after retreating from the oversold territory. This suggests that the sellers are still in control, despite easing selling pressure. In addition, the On Balance Volume (OBV) hasn’t crossed the October threshold, indicating that AAVE is yet to record solid bullish recovery. 

As a result, the bearish flag pattern could facilitate a trend continuation. The sellers may push AAVE lower. If sentiment on BTC also turns bearish, AAVE could fall further. Sellers can expect new support levels at $49.6 and $48.2.

However, a session close above $64.1 will invalidate the bearish inclination. 

A confirmed breakout on the upside would allow entry into a long position with $70.7 as the primary target. The bearish order block at $86.1 and the 0.236 Fib level ($64.1) may also be secondary targets.  

Holders suffer losses despite improved sentiment

Source: Santiment

An analysis of Santiment’s data revealed that AAVE enjoyed positive weighted sentiment at press time. 

However, positive sentiment is still insufficient to protect AAVE holders from losses. The 30-day market value to realized value ratio (MVRV) remained in negative territory. This shows that short-term AAVE holders are still suffering losses since the market collapse on 8 November.

AAVE investors should therefore monitor the king coin’s sentiment before making any move on the possible patterned breakout. 

Share

Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.