Aave looks ready for a rally
AAVE didn’t have a bull run this year like many other assets. However, the DeFi token appears to have reached a strong demand zone that could lead to a recovery.
AAVE shows bullish signal
Aave may be preparing to move with the uptrend in other assets in the market.
Several mid-cap tokens such as Avalanche (AVAX), Loopring (LRC) and Curve (CRV) have gained more than 20% in the past week, although the two top cryptocurrencies Bitcoin and Ethereum are still correcting. Avalanche hit a new all-time high of $ 144.96 on Sunday.
Data from DeFi Pulse shows More than $ 7 billion was added to Total Value Locked (TVL) in DeFi logs last week, despite the fact that total crypto market capitalization is down almost 8%. The increase indicates a growing interest in the emerging market sector.
Interestingly, some blue-chip DeFi projects like Aave are yet to see the same surge. AAVE / USDT is down about 10% over the past week and the losses in the AAVE / ETH pair are even bigger. Ethereum has outperformed DeFi tokens like AAVE all year round.
AAVE went through an 11 month period of consolidation. It has seen a series of lower highs and higher lows since the beginning of the year without giving any clear guidance on the next step. Price action appears to have developed into a symmetrical triangle on the three-day chart.
Moving AAVE to the top of the pattern signals that a big move is imminent. The height of the triangle indicates stagnation, which can lead to price movements of up to 82%. However, AAVE must first break and close the daily candle above the USD 330 resistance to advance towards the previous all-time high of USD 667.
However, any sign of weakness around the $ 237 support could invalidate the bullish outlook and result in a 22% correction.
AAVE / USDT 3-day chart | Source: TradingView
The AAVE / ETH pair also appears to be rallying after falling more than 80% since early February.
The Tom DeMark (TD) Sequential Indicator gave a buy-signal on the 3-day chart. The bullish signal is formed as a green 9-count candle, which represents an increase between 1 and 4 three-day candles or the beginning of a new uptrend.
3-day AAVE / ETH chart | Source: TradingView
Increased buying pressure around the current price level could push AAVE to 0.075 ETH. The DeFi token can break out of this resistance and rise to 0.12 ETH if the uptrend is strong enough.
It is worth noting that all of the buy signals the TD Sequential has formed since February have resulted in a rapid upward move thereafter. The 0.061 ETH support is critical as a break of this level could result in a drop to the 26% fib retracement level at 0.045 ETH.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
According to crypto briefing