AAVE has been showing strength in a consolidating market for several weeks. The token is performing well against the dollar, driven by solid fundamentals. Against Bitcoin, although the trend has been bearish since May 2021, it could show some encouraging first signals.
It is Friday, September 13, 2024, and the AAVE price is around $140.
The AAVE token, from the eponymous protocol, is now ranked 44th in order of capitalization within the crypto market. This is an increase of 18 places since our last analysis on July 16, 2024 in which we had mentioned the possibility of a renewed strength for the project.
It is particularly good prospects on the fundamental side that work in favor of a return to the light of the AAVE token. Indeed, a new proposal from the DAO could redefine the place of the protocol in the ecosystem.
Pairs vs AAVE | 24 hours | 7 days | 1 month |
AAVE/USDT | -4.50% | +13.60% | +43.20% |
AAVE / Bitcoin | -4.50% | +9.50% | +50.10% |
AAVE / Ethereum | -5.00% | +13.60% | +65.20% |
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AAVE, on the way to the upper floor?
In the long term, the AAVE token is showing reversal signals with a recent high beyond the March 2024 highs. This latest move comes after a new low (around $70) higher than the bear market lows. This is a bullish trend that seems to be taking shape.
The crossing is however still timid, in a difficult market context the weekly closing will be rich in lessons. To maintain the idea of a bullish development, price action must settle above $140.. In addition, it is advisable to close above last week's highs to maintain good weekly momentum.
To the south, the 7-week moving average near the area drawn in red and the lows of the last week of August ($117 to $118) represents the first support for the upward trend. This could be called into question if the 20- and 50-week moving averages, which converge near the psychological level of $100, are crossed at the weekly close.
If this structure holds, we could see price action developing towards a target near $255. On the contrary, invalidating this construction could push AAVE back close to $75, a level we visited in early August 2024.
AAVE token weekly chart
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In the shorter term, The AAVE token is well anchored in its daily bullish trend. However, we can observe signs of RSI divergence between the highs of August 23, 2024 and September 10. This suggests that a consolidation could impact the price action.
This is probably a good opportunity to test the dynamic supports that are waiting aligned to the upside to play their role. They could thus confirm the establishment of a flow that would take the token beyond $158. The first bulwark to slow down a bearish price action is the 7-day moving average located at $139.79.
If the latter were to be crossed, the 20-week moving average could revive the price action at contact with $131.89. Finally, the last bastion of an invalidation of this daily bullish flow is the 50-week moving average, in confluence with the supertrend and the lower Bollinger bands between $112 and $118.
AAVE token price chart daily
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AAVE, a major pivot to cross against Bitcoin
In a crypto market that has been mostly underperforming Bitcoin since January 2023, it is essential to analyze performance against BTC. In this regard, AAVE has been showing positive signs since June 2024.
Indeed, although the underlying trend has remained deeply bearish since May 2021, a low point could be building. A first confirmation is expected with the crossing of the December 2023 peaks. Thus, the AAVE vs BTC pair could settle above the pivot drawn in green.
This remains very early for the moment, but the crossing of the bearish trend line and the test of this pivot allow us to establish a reversal scenario with a decent chance of success. However, it is appropriate to specify that in the event of failure on this first attempt, we could build a new low higher than the previous one before crossing the pivot.
AAVE vs BTC Monthly Price Chart
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In summary, AAVE has been showing strength since early August in a market in full consolidation. The pair against the dollar is in an uptrend and is managing to revisit areas it had not reached since May 2022.
However, be careful of the daily divergence that is emerging on prices and which could show signs of running out of steam. Against Bitcoin, AAVE also seems to show some encouraging signs, although the trend remains bearish in the long term.
So, do you think AAVE can reverse its trend against BTC? Please feel free to give us your opinion in the comments.
Sources: TradingView, Coinglass, Glassnode
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