The price of Aave (AAVE) surged by 49.7% over the past five days, surpassing its previous high of $180.74. The cryptocurrency had found solid support in the $137-$140 range, but dropped below it on November 4th.
This deviation was followed by a quick rally, demonstrating the strong bullish momentum behind AAVE. While further price gains are expected, the $206 resistance level poses a challenge. Additionally, the $190 area could potentially stall the upward momentum.
AAVE Successfully Turns $180 into Support
On November 7th, AAVE broke above its previous high from September at $180.7. Despite increased volatility on November 8th, the bulls managed to keep the $180 level as a support zone.
The next targets for the bullish trend are the Fibonacci extension levels at $206 and $248. The daily RSI has convincingly crossed above the neutral 50 mark, indicating a likelihood of further gains. However, the On-Balance Volume (OBV) struggled to surpass the September peak.
This struggle could be a sign that sustained buying pressure is necessary to confirm an upward trend for AAVE. Yet, current price action favors the bulls, making long positions viable.
Expect Volatility from Liquidity Pools
An analysis of the 3-month liquidity heatmap reveals significant liquidity at $133, $128, and $121, with the first two levels breached in late October.
The positive market sentiment surrounding Bitcoin (BTC) played a role in AAVE’s strong recovery after dipping below $130.
Looking at the 1-week heatmap, it is evident that the $190 region has accumulated substantial short liquidation levels in the last few days. This area is likely to see increased activity, with a potential revisit to the $171-$175 zone.
Traders should brace for heightened volatility around the $190 and $170 levels before a possible breakthrough above $200 in the coming days.
Disclaimer: The views expressed in this article are opinions and should not be considered as financial advice or recommendations for trading.