- AAVE rose this week, surpassing the top altcoins after a dip
- However, despite strong technical indicators, concerns are starting to arise
With its weekly gains surpassing some of the leading altcoins in the market, AAVE has gained significant traction in this bullish cycle. Especially since 24-hour trading volume increased by almost 12% to $180 million.
This recovery followed a recent plunge, as noted by another AMBCrypto report. Interestingly enough, with the RSI dipping into oversold territory at the time of writing, the current price of the altcoin offers plenty of opportunity for traders to view it as a “dip” before a huge parabolic wave. Especially with the bullish MACD crossover.
With a price of $150 at the time of writing, can AAVE continue its recovery and break the critical resistance level at $200? With two recent failed attempts, it would be interesting to see if AAVE can finally make its move.
Technical indicators support this scenario
With AAVE valued at around $150, the potential for a rally to $200 is firmly on the table, especially if several positive technical indicators are in play.
However, this cycle tells a different story. In March, when BTC reached its ATH of $73,000, AAVE enjoyed a sustained bull rally that lasted for over a month and eventually closed close to the press time price.
On the contrary, with BTC approaching a similar peak this time around, AAVE has experienced some notable pullbacks. Since late September, the price has been consolidating, with four failed attempts to break the $150 resistance level.
Amid rising volatility due to the upcoming elections, Bitcoin is likely to attract most of the liquidity. This could divert interest from lower-capitalization altcoins.
Source: Coinglass
Furthermore, there has been a significant increase in the number of short positions in the derivatives market – a trend that makes sense given the current circumstances.
If this story does not reverse itself, AAVE may face a downtrend and could fall to $140. This could be an attractive entry point for new investors, even as technical indicators point to a bullish outlook.
Short-term gains for AAVE seem more likely
Over the past two days, investors have withdrawn more than 20,000 AAVE tokens from the exchanges, indicating that the altcoin’s price represented a sharp dip. However, this moment of optimism quickly faded as investors began divesting their holdings.
Source: CryptoQuant
The reasoning is simple: The market is volatile right now. Until stability returns, investors will likely view Bitcoin as a safe haven, alongside assets like gold, silver and bonds.
Read Aave’s [AAVE] Price forecast 2024–2025
While the current price of AAVE seems attractive accumulation it is difficult to confirm whether a bull rally is in the offing. Short-term gains are likely to keep AAVE around $150 for now, especially if BTC continues its bullish trajectory.
However, a retracement to $140 seems more likely. Until pre-election uncertainty subsides, it may be difficult for whales to deconsolidate the AAVE, even if they goal the dip.
