AAVE slips to $200: Watch THESE two support levels before any rebound
AAVE’s buyback push couldn’t offset market weakness; bearish metrics now hint at fresh downside pressure.
Key Takeaways
Has the Aave token buyback program helped bolster market confidence?
While it initially saw a positive reaction on the price charts, the subsequent range formation curtailed how far bulls could drive prices, and bears were in control once again.
What is the evidence supporting a bearish AAVE outlook?
The increased taker sell volume in recent weeks and the breakdown from the range lows showed that bulls were too weak to defend the psychological $200 level now.
Aave [AAVE], one of the leading DeFi protocols, was in the news recently after approving a $50 million buyback program.
The initiative aimed to repurchase up to $1.75 million worth of AAVE weekly, depending on protocol revenue and other factors.
Since May, when the buyback pilot was launched, 94 million tokens worth over $22 million have been bought. This deflationary mechanic, combined with the general market strength, saw Aave token prices rally to $385 in August.
Since then, the market has faced weakness.
The most recent Bitcoin [BTC] slump below the key support at $108k last on the 3rd of November saw Aave prices tank. At the time of writing, the $200 psychological level was being contested by both bulls and bears, but one side has the upper hand.
Aave prices to slide another 15%
The Taker Buy/Sell Volume from CoinGlass showed that the 24-hour AAVE volume has rarely been taker buy-dominant over the past month. This meant that the bulls have not had the strength to drive prices higher due to overwhelming selling pressure.
At the time of writing, the Long/Short Ratio was at 0.918, showing there was more taker sell volume. This implied that prices were ready to fall further in the short term.
Range breakdown confirms bearish bias
On the daily chart, the downtrend has persisted for over a month. AAVE continues to post lower highs and lower lows, aligning with the bearish crossover between its 20-day and 50-day moving averages.
More importantly, the price action since May revealed a range formation (white) between $221 and $336.
The recent market volatility saw AAVE drop below the range low, and the $210-$225 area was now a stern resistance zone.
As things stand, the price is likely to slide lower still. The next support levels to keep an eye on are $170 and $141.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
