Crypto: Buying Opportunity On AAVE? Technical Analysis Of August 29, 2024

After two consecutive weeks of increase, AAVE undergoes a correction of more than 10%. Let’s examine the future prospects for AAVE’s price.

AAVE’s Situation

Since May 2022, AAVE has gone through a consolidation phase between $46 and $123. It wasn’t until March 2024 that the cryptocurrency surpassed this last price level, reaching a peak at $154. Unfortunately, buyers’ interest in the cryptocurrency did not last, leading to a decline to its last identified support around $75. It is at this price level that buyer support was observed. Indeed, after a short consolidation phase, AAVE recorded an increase of 105% in two months. Everything suggested that the cryptocurrency would reach or even exceed its last peak at $153, however, the crypto market being revised downward weighed on the price of the cryptocurrency.

At the time of writing, the price of AAVE is trading around $121. The short-term trend of the crypto is bullish, as is its medium and long-term trend. These observations are supported by the fact that the crypto is still above its 50 and 200-day moving averages, both trending upwards. Regarding AAVE’s momentum, although it has recently declined, it remains bullish, as evidenced by the price of the crypto itself and its oscillators.

The current technical analysis was carried out in collaboration with Elie FT, an investor and passionate trader in the cryptocurrency market. Today, he is a trainer at Family Trading, a community of thousands of proprietary traders active since 2017. You will find Lives, educational content, and support around financial markets in a professional and warm atmosphere.

Focus on AAVE/USDT derivatives

The rise of AAVE occurred alongside an increase in its open interest. Coupled with a growing CVD, we can deduce that the speculative interest in the crypto has been primarily buy-oriented. On the funding rates side, they oscillate between positive and negative, demonstrating a healthy AAVE/USDT contract, relatively well arbitraged with its underlying asset. Finally, regarding liquidations, we can see that there was recently a peak in sell liquidations, showing a recent capitulation of selling force.

The heat map of AAVE/USDT liquidations over three months shows that the crypto has crossed the liquidation zone around $120 from above. It seems this zone has sparked buyer interest, with AAVE continuing its rise. Currently, notable liquidation zones are below the current price. We can first note the subtle zones between $117 and $113. Next, the most apparent one is between $105 and $100. The approach of the price towards these levels could trigger a massive order, thus increasing the risk of a period of increased volatility for the crypto. These zones therefore represent a crucial point of interest for investors.

Hypotheses for AAVE’s price 

• If AAVE’s price remains above $105, we could anticipate crossing $153. The next resistance to consider, if the upward movement continues, could be around $200. Beyond that, we can note $260, which would represent an increase approaching 112%.

• If AAVE’s price fails to remain above $105, we could envisage a return to levels of $90. The next support to consider, if the downward movement continues, would be around $75, representing a decrease of approximately 38%.

Conclusion

AAVE has experienced a long consolidation phase followed by a significant rise. Following a slight downward correction, the crypto initiated a rebound. Unfortunately, market pressure limited its potential for progression. Currently, the cryptocurrency’s trend remains positive, supported by favorable technical indicators. Thus, optimism is warranted. However, it will be crucial to closely observe the price’s reaction at various key levels to confirm or invalidate the current hypotheses. It is also important to remain vigilant against potential “fake outs” and market “squeezes” in each scenario. Finally, let us remember that these analyses are based solely on technical criteria and that the prices of cryptocurrencies can also evolve rapidly depending on other more fundamental factors.