Aave Coin Hits a New Low Below $200: Traders Urged to Keep a Close Watch on Critical Levels
After seeing a remarkable surge of 465% from July to December, Aave [AAVE] has started to retrace its steps, resulting in a drop in prices amidst deteriorating market sentiment.
For those bullish on AAVE and looking to increase their holdings, monitoring the $141 and $177 levels and waiting for a consolidation pattern could be a prudent strategy.
Short-term outlook suggests an uptick in volatility, with a possible jump to $216 in search of liquidity within the next few hours.
Is Aave in Danger of Losing the $200 Support Barrier?
Over the past couple of months, Aave has retraced a significant portion of its Q4 2024 gains, breaching support at $284 and $235, with a looming threat of dropping below the $196 mark as well.
Looking down the line, the $177 and $141 levels are crucial support areas where bullish momentum might kick in. While the weekly chart shows a bullish swing structure, the ongoing retracement could potentially dip to the $125-$141 range.
Analysis of the A/D indicator suggests that the recent selling pressure has not yet outweighed the previous buying volumes. The Awesome Oscillator signaled a shift in momentum around mid-January.
Examining the daily chart reveals a predominantly bearish structure, although trading volume has been relatively subdued in recent days. The A/D indicator remains close to January’s peak, while the Awesome Oscillator indicates a clear bearish trend, pointing to support levels at $196, $171, and $155 for a potential reversal.
Potential Aave buyers might prefer awaiting a consolidation period post-retracement before initiating bids, signaling a period of price stabilization.
Looking ahead, the $192 and $216 levels present interesting points as recent data shows accumulation of liquidation levels over the past 24 hours. The AAVE liquidation heatmaps for the 2-day and 3-day periods also identify $216 as a significant liquidity area in the northward direction, followed by a substantial cluster at $270.
Given the escalating volatility at the moment and the magnetic effect of liquidity on prices, traders should exercise caution as a potential 12% bounce in AAVE prices towards $216 to clear liquidity might precede a resumption of the downtrend.
Disclaimer: The opinions expressed in this article are personal and do not constitute financial, investment, trading, or any other form of advice.