Given the current uncertainties in the market, Aave [AAVE] seems to be heading towards a price reduction in the upcoming days, as it has developed a bearish pattern in its daily price movements.
Alongside the negative price movements, another factor that might contribute to AAVE’s pessimistic outlook is the general market sentiment and the probability of profit-taking among alternative cryptocurrencies.
Not only AAVE but also other prominent digital assets like Bitcoin [BTC], Ethereum [ETH], and XRP are witnessing similar patterns.
Potential Bearish Trend for AAVE
An analysis by the on-chain data platform Coinglass indicates that exchanges have observed a substantial inflow of more than $5.2 million worth of AAVE, hinting at a bearish signal for the crypto.
In the crypto sphere, an inflow denotes the transfer of assets from wallets to exchanges, often indicating a potential selling pressure that could trigger a price decline.
Furthermore, recent activities of long-term holders and traders’ tendencies suggest a growing interest in short positions, anticipating a potential price decrease, as indicated by Coinglass.
Currently, AAVE’s Long/Short Ratio stands at 0.79, the lowest it has been since late November 2024. A ratio below 1 signifies a strong bearish sentiment among traders.
At the moment, 58.9% of top AAVE traders have taken short positions, while 41.10% have opted for long positions.
Evidently, traders and long-term holders are more inclined towards short positions, thereby reinforcing the bearish stance for the asset. This shift aligns with the recent emergence of bearish price movements.
AAVE Technical Evaluation and Future Levels
According to CryptoCrypto’s technical scrutiny, AAVE has formed a double-top bearish pattern in its price actions. The charts also display a bearish divergence on the daily timeframe, suggesting a potential price decline in the days ahead.
Considering the recent price actions and previous momentum trends, there is a likelihood of a significant 18% drop in value, potentially reaching the $290 mark in the near term.
Current Market Movement for AAVE
As of the latest data, AAVE is trading close to $350 following a decrease of more than 9% in the last 24 hours.
Simultaneously, the trading volume has decreased by 28% during the same period, indicating reduced engagement from traders and investors amid the prevailing bearish market conditions.