AAVE sellers could force a drop to $73, here’s how
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The market structure was bearish on the one-hour chart after failing to breakout past $81.
- The four-hour chart had a bullish outlook and could see Aave surge higher.
Bitcoin [BTC] has see-sawed from $28400 to $27300 over the past 24 hours until press time. The Fed’s policy meeting on 21 and 22 March could see the king of crypto break out of this short-term range. In the meantime, altcoins like Aave [AAVE] presented lower timeframe trading opportunities.
Read Aave’s [AAVE] Price Prediction 2023-24
With major economic news right around the corner, volatility is likely to be high in the crypto market for the next 48 hours. Hence, risk management, which should always be the top priority, will be essential.
The short-term mid-range level could offer resistance
Over the past week, AAVE has traded within a range (yellow) from $73.2 to $81.6. The mid-range value sat at $77.4. Over the past two days, this level was breached as a support level and flipped to resistance.
The past few hours of trading saw a bounce in prices toward the mid-range mark. However, the RSI has not yet broken out past the neutral 50 mark. The DMI also showed a downtrend in motion with both the ADX (yellow) and the -DI (red) above the 20 mark.
Therefore, a shorting opportunity could arise upon a retest of the mid-range level. It would be invalidated upon an H1 session close above $77.2, but some volatility could be present. A stop-loss near $79 can be set, as this would invalidate the bearish idea.
A move above $79 would indicate that the bulls were back in the driver’s seat and could push AAVE toward $82. More risk-averse market participants might want to wait for a rejection from $77.2 before entering short positions.
How much is 1,10,100 AAVE worth today?
The decline in Open Interest noted discouraged buyers
Over the past two days, alongside the decline in prices, the Open Interest has also fallen. This meant that long positions were forced to close, but short sellers did not enter the market in large numbers yet. Therefore, the sentiment behind AAVE was bearish, but not extremely so.
The funding rate hovered close to zero but was in the positive territory, which meant buyers had a very slight upper hand. Yet the spot CVD has been in a constant downtrend over the past week. This showed strong selling pressure.