AAVE’s rally hits key roadblock: Will sellers benefit?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Sellers curtailed bullish advance with rejection at key price level.
- Bullish momentum was still present, as evidenced by short-term dominance in the futures market.
Aave [AAVE] experienced a double price rejection at the $70 resistance level over the past 72 hours. The bullish rally failed to cross the significant price hurdle, which meant that AAVE’s bearish market structure persisted on the higher timeframes.
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In the meantime, Bitcoin [BTC] briefly touched $28k before dropping to trade at $27.8k, as of press time.
Buying pressure wanes at a critical price level
The Relative Strength Index (RSI) highlighted the loss of bullish pressure after the strong rally from the $61 support level. The RSI dipped under the neutral 50 mark, hinting at increasing selling pressure.
AAVE could retest the $61 support level in the coming days if the selling pressure persists. However, if BTC crosses $28k, this could spur another wave of bullishness across the market, with AAVE buyers looking to flip the $70 level to support.
If bulls successfully cross the $70 hurdle, it would overturn AAVE’s market structure from bearish to bullish on the higher timeframes, with buyers able to push for more gains at $75 to $80.
Meanwhile, investors adopted a conservative approach, with the Chaikin Money Flow (CMF) revealing a large outflow of capital with a reading of -0.15.
Futures market pointed to another wave of bullish momentum
Read Aave’s [AAVE] Price Prediction 2023-24
The short-term momentum remained with bulls in the Futures market. Data from Coinglass showed that longs held a significant 53.38% share of the Exchange Long/Short Ratio. This amounted to $3.36 million worth of buying positions.
As such, a near-term recovery could be triggered, leading to a retest of the $70 support level.