AAVE Price Maintains Strong Momentum Despite Market Pressures

AAVE Price Maintains Strong Momentum Despite Market Pressures

Over the past week, AAVE has demonstrated remarkable resilience, maintaining a robust upward trajectory despite the broader market’s supply pressures. While Bitcoin’s retreat from the $70,000 mark on Monday introduced renewed selling pressure across the altcoin market, AAVE has remained steadfast, now just 8% away from a potential breakout.

AAVE Approaches Critical Breakout Zone

Following the July market rebound, AAVE surged impressively from $71 to $107.13, marking a 50% increase. This is the second significant reversal from the $71 level in the last three months, underscoring investor interest at lower levels and forming a double-bottom pattern. This bullish formation, characterized by a ‘W’-like structure, occurs when prices bounce back from nearly identical support levels.

Further reinforcing the bullish outlook is the Relative Strength Index (RSI), which is showing a higher low, signaling increased demand at the lower end. Additionally, the 50-day Exponential Moving Average (EMA) is on the cusp of crossing above the 200-day EMA, potentially signaling a buy. With AAVE trading above its daily EMAs (20, 50, 100, and 200), the technical indicators suggest a favorable outlook.

Currently, AAVE is trading at $106.5, reflecting a 1.2% intraday gain, while its market cap has risen to $1.58 billion.

Should the double-bottom pattern play out, AAVE could climb an additional 8% to test the next resistance at $114.7. The target for this pattern is calculated by measuring the distance from the support level to the neckline, and then projecting that distance from the breakout point to estimate the potential upside.

If buyers can turn the $114.7 resistance into a support level, the ensuing breakout rally could propel AAVE by another 38%, targeting a price of $157.

However, breaking through the $114.7 resistance may prove challenging. Should Bitcoin continue to face resistance around the $70,000 supply zone, AAVE, like many major altcoins, may see its recovery stall.

A rejection at $114.7 could invalidate the bullish outlook, leading to an extended consolidation phase. In such a scenario, AAVE could retrace back to the $71 level, where renewed buying interest might emerge.