Support area rebound propels Aave to higher high
For months, Aave has been in a continuous downward trend since reaching its all-time high of $670. Our previous analysis indicated the presence of a descending triangle chart pattern, a bearish chart pattern used in a downtrend market. Thus, I discussed only its bearish potential. However, we can now observe that there is also bullish potential.
Overview of Aave’s Price Action
Aave, one of the leading platforms in the DeFi space, has gained significant attention from investors and traders. Like other cryptocurrencies, its price experiences fluctuations due to market sentiment and demand. Analyzing the recent price movement, we can observe a notable bounce off the critical support level (white horizontal line) at $49.20, followed by a surge to a higher high.
Higher High Formation
Following the bounce off the support area, Aave showed strength as it continued its upward movement. Price broke out of the trendline resistance, surpassed the previous highs (red arrow) at $69.22, and formed a higher high at $79.52, implying a change of character (CoC). This higher high is an encouraging sign for Aave and indicates a bullish potential.
Watching Out for Key Resistance Levels
Support area rebound propels Aave to a higher high; as this happens, it is essential to identify the resistance levels that might hinder its upward movement. Traders and investors should monitor key resistance levels (red horizontal lines) at $83.29 and $93.58.
Implications and Outlook
Aave’s formation of a higher high indicates a shift in market sentiment. It suggests that buyers have regained control, potentially leading to a bullish trend in the near term. However, traders should remain cautious and monitor future price movements closely, as a break above the resistance levels mentioned earlier would solidify the bullish bias. Additionally, there is the chance that the price might have a retracement or pullback upon approaching any of the resistance levels.
The price action we’ve briefly dissected is still encased in the internal structure of the weekly time frame. While the price broke the minor trendline on the daily time frame, it has just approached the major trendline on the weekly and with a large bullish candle.
Conclusion
Aave, a prominent DeFi platform, has demonstrated a promising price action pattern by reacting to the support area and forming a higher high. This indicates a potential bull run in the making, with important resistance levels to keep an eye on. As always, it is crucial to conduct thorough research and analysis before making any investment decisions.
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Disclaimer: The information on AlteBlock reflects the authors’ personal opinions. It does not represent AlteBlock’s opinions on whether to buy, sell, or hold specific investments. It is suggested that you conduct your own research before making any investing decisions. You use the information at your own risk. See Disclaimer for additional details.
Dominic Jubemi is primarily into legal practice. However, he has taken interest in building and grooming fundamental skills in FX and Crypto trading, audio engineering and in the nearest future, fiction writing.
