AAVE Technical Analysis: Descending Triangle Warns Downfall Under $50

Breaking below the psychologically important mark of $55, AAVE price actions show bearish momentum due to a lack of interest among the buyers. AAVE has been struggling to recover from the recent crypto crash which accounted for a drop of 38.2% in the last 14 days. Currently trading at $53.56 as of writing, AAVE plunged by 4.56% during the last 24 hours with a 24-high of $57.50. The 11.43% drop in trading volume to $94.79 million and the 4% decline in market cap to $800.17 million strongly support the bearish sentiment in the market. 

Key Points

Source: Tradingview

AAVE Technical Analysis

AAVE prices steeply dived from 78.60% Fib replacement level to below 23.60% reflecting strong bearish momentum as buyers struggled to pull the prices above the crucial mark of $55. A sharp decline from the 200-day SMA also supports a prolonged downtrend caused by selling pressure in the market. Although AAVE pulled back from $53.55 while making a double bottom, it could not convert the upswing into a bullish reversal. Moreover, the descending triangle pattern made by the trendline reaffirms the deep trouble in the market. If AAVE breaks above $55, there would be entry opportunities for sideline traders. But, if prices approach the $50 support level there could be further turbulence in the market. 

Technical Indicators

Making a bearish divergence, RSI dived down below the 14-day SMA indicating a downswing at 40.79, showing a lack of interest among buyers. After witnessing a brief upswing MACD also plunged below the halfway line under the signal line on an increasingly bearish histogram. 

The technical indicators exhibit there is a lack of uptrend despite a couple of brief bullish spells as AAVE could not maintain the reversal cycle due to high selling pressure in the market, with the trendline making a descending triangle pattern.