Uptick In Social Metrics Triggers Defi Token Aave Price Rally Toward $360
- Aave price breaks from bull flag pattern as gains eye liftoff to $360.
- Increased on-chain activity shows that AAVE’s recovery will be sustained.
- A spike in social volume quickly turns sentiment negative as investors rush to take profits.
Aave is in the middle of a recovery mission alongside other cryptocurrencies on Friday. The decentralized finance (Defi) token fell victim to the rampant overhead pressure since July 6. After trading a monthly high of around $350, it became challenging for bulls to secure higher support.
The technical picture worsened earlier this week as a bearish cloud hovered above the crypto market. Bitcoin dropped under $30,000 for the first time in July while Ethereum tested support near $1,700.
Aave plunged toward $200, but bulls managed to secure support slightly above $212. The price did not stay underwater for too long as cryptos came up gasping for air mid-week. Aave shot upward, breaking out of a crucial technical pattern on the four-hour chart. If the technical picture improves, the Defi token may extend the bullish leg to $360.
Aave Price Uptrend Aims For $360
The four-hour chart illustrates a bull flag formation, hinting at the uptrend gaining traction in the near term. This pattern is highly bullish and often leads to the continuation of the previous trend.
A bull flag forms after a significant move (the flagpole) in an asset’s price followed by a correction or consolidation (the flag) period. However, buyers often take control as the flag nears half the length of the flagpole, as illustrated on AAVE’s chart. Subsequently, a considerable upswing (approximately half the flagpole length) follows the breakout, explaining Aave’s $360 prediction.
AAVE/USD four-hour chart
Santiment, a behavioral analytics platform, affirms a significant improvement from the on-chain front. For instance, the number of addresses interacting on the Aave network has surged in the last two days. Note that an uptick in this metric shows that speculation is rising, and the uptrend is relatively sustainable. Therefore, it is imperative to note that Aave will continue closing the gap to $360 in the short term.
Aave Active Addresses Metric
What May Invalidate The Upswing To $360?
On-chain data by Santiment also shows a massive spike in the number of amount of social media-related mentions. Thousands of social media channels, including Twitter, Telegram, and subreddits, contribute to the total aggregate of the metric.