Within the last 24 hours, AAVE’s market has experienced a significant 11.27% drop. This downward movement may not come to an end soon, as other indicators suggest a prolonged decline in the near future.
Despite this scenario, technical analysis has hinted at a possible reversal for AAVE, presenting the cryptocurrency at a pivotal point. Therefore, CryptoCrypto delved into AAVE’s potential future movements amidst these conflicting signals.
Decline in AAVE Fueled by Investor Withdrawals
Reports from DeFiLlama point to a noticeable decrease in the Total Value Locked (TVL) in AAVE, indicating that investors are pulling out from the platform.
Currently, AAVE’s TVL stands at $11.941 billion. If this trend continues, AAVE could witness further declines in its market performance.
TVL, which gauges the total worth of assets deposited in DeFi protocols, typically reflects the overall market involvement and capital commitment.
The surge in the number of active addresses underscores the trend of investor withdrawals, with a 6.85% increase to over 1,020 addresses at present, pointing towards heightened activity, predominantly in sell-offs, as AAVE’s price dips.
Significant Losses Incurred by Long Traders in AAVE Market
Investors who banked on AAVE’s sustained upward movement have faced notable losses amid the market turning against them.
Per data from Coinglass, traders lost $1.91 million as they bet on AAVE’s price surge. Additionally, a notable discrepancy between long and short positions emerged, with a noteworthy tilt towards losses on long positions.
Further amplifying the negative sentiment is the observed drop of 20.23% in Open Interest, implying a potential continuation of sell-offs by AAVE holders.
Potential Reversal Signal through Technical Analysis for AAVE
Technical indicators on the charts have hinted at a promising turnaround for AAVE’s market trajectory, with the cryptocurrency potentially gearing up for an upward shift.
AAVE has reached a critical juncture on the chart, where a horizontal resistance line intersects a diagonal resistance line. Encouragingly, AAVE responded positively to this juncture, portraying signs of an upward momentum. If this resistance level holds, AAVE could see a surge towards $180.74.
Alternatively, in case this resistance level fails to sustain, AAVE might experience a decline, potentially dropping to as low as $119.