Key technical points:
AAVE price action shows a falling wedge pattern resulting in an 80% fall from $245 to $50, but the recent bullish reversal challenges the resistance trendline. However, the falling trend in the trading volume and the higher price rejection in daily candles warn of a bearish retracement.
Source- Tradingview
The daily candles start to showcase wick formations reflecting higher price rejection from the resistance trendline. Hence, traders can expect a downtrend in AAVE price, retesting the support trendline and the $50 fallout. The DMI indicator displays the DI lines merged with no significant alignment in the daily chart. Moreover, the free-falling ADX line reflects a drastic loss in trend momentum.
The RSI indicator indicates a slow bearish turnaround from the halfway line resulting in a retracement closer to the 14-day SMA. Hence, the indicator showcases a loss in underlying bullishness, teasing an upcoming downfall in market prices. The MACD indicator displays the growing bearish influence on the fast and slow lines as the bullish spread decreases, increasing the chances of a crossover. In addition, the falling intensity of the MACD histograms adds points to the bearish crossover possibility. Hence, the technical indicators and the AAVE price action analysis maintain an overall pessimist outlook.
If the bearish trend momentum increases, the AAVE prices will crack under the psychological mark of $50 to test the support trendline.
Resistance Levels: $76 and $100
Support Levels: $60 and $50