- Aave price downtrend persists, but the 50 SMA may be a reprieve to the bulls.
- A bull flag pattern on the 12-hour chart suggests that recovery is in the offing.
Aave joined the rest of the cryptocurrency market in a downhill exploration mid through the week's trading. Following July highs of $340, the decentralized finance (Defi) token tested support at $250, reinforced by the Simple Moving Average (SMA). Meanwhile, AAVE trades at $271 amid a brutal tug of war between the bears and the bulls.
Aave Price Downtrend Could Be Unstoppable
According to the Moving Average Convergence Divergence (MACD) indicator, Aave may remain in the bears' hands a while longer. This bearish signal appeared after the 12-day exponential moving average (EMA) moved below the 26-day moving average. Realize that the MACD follows the trend of an asset and calculates its momentum.
The odds for another dip, perhaps back to $250 or father down to $220, will soar if the MACD crossed below the mean line. In other words, sellers are compelled to offload their bags in anticipation of Aave closing the day or the week at lower price levels.
AAVE/USD 12-hour chart
Massive resistance is expected between $281 and $298, according to IntoTheBlock's IOMAP on-chain model. Here, roughly 3,000 addresses previously bought around 2.2 million AAVE. Trading above this zone could allow bulls to tackle areas above $300. However, if it stays unchallenged, the buying pressure will be absorbed, paving the way for more losses, as earlier discussed.
On the downside, the lack of a robust support range hints at the losses gaining traction in the near term. Nonetheless, the region from $248 to $257 could absorb some of the selling pressure and prevent a drastic drop to $220.
Aave IOMAP model
How Aave Could Trigger An Uptrend to $445
The 12-hour chart shows the formation of a bull flag. This is a highly bullish pattern that often leads to the continuation of an uptrend. A bull flag pattern appears massive in the asset's price, followed by a consolidation period.
Aave is expected to break above the technical patter before the consolidation extends more than half of the flagpole. Traders can watch out for a break past the flag's upper trend line, which a spike in volume will accompany. It is worth mentioning that Aave may soar 22% from the breakout to trade at $445 if the bull flag matures within its limits.