AAVE Price Surges by 10% Following Significant Sell-Off: What Comes Next?
After an impactful sell-off by a major player, Aave [AAVE] has seen a rapid 10% increase in its price, bouncing back to pre-dump levels.
During a significant market downturn on September 4th, the entire cryptocurrency landscape faced a notable decline, with Bitcoin [BTC] slipping below the $57,000 threshold.
Recent Activity of the Aave Whale
A significant AAVE investor offloaded their complete stash of 17,447 tokens valued at $2.16 million, resulting in a loss of $2.14 million, as per data from on-chain analytics provider Lookonchain.
This particular whale had initially acquired the AAVE tokens for $4.3 million from Binance back on March 28, 2021, at an average price of $246.
The multimillion-dollar AAVE dump took place at a critical support level of $118 and was poised to generate selling pressure, but the expected outcome did not materialize.
Surging AAVE Price and Open Interest
Currently, AAVE is priced around $130, registering a modest decline of 1.25% in the past 24 hours. Trading volumes have surged by 85% during the same period, indicating heightened trader involvement.
Furthermore, AAVE’s Open Interest has surged by 15% in the last four hours and by 5.5% in the previous hour, according to Coinglass.
This uptick in Open Interest signals a growing interest from investors and traders amidst the recent price volatility.
Technical Analysis and Key Thresholds
Expert technical analysis pointed towards an uptrend for AAVE, given its position above the 200 Exponential Moving Average (EMA) on the daily timeframe.
Presently, AAVE is consolidating within a narrow range of $118 to $134 over the past few days.
On the four-hour timeframe, a notable resistance level looms near $135. Should AAVE breach this threshold and close a candle above it, the price could potentially surge to $146.
However, there is also the possibility of a price reversal upon hitting this resistance level.
Significant Liquidation Levels
Current major liquidation thresholds stand at approximately $125 on the lower end and $131.5 on the upper side, as intraday traders are heavily leveraged at these price points, according to on-chain analytics firm Coinglass.
If the sentiment alters and the price drops to $125, nearly $1.46 million worth of long positions could get liquidated.
In contrast, a shift in overall sentiment resulting in a price surge to $131.5 would lead to the liquidation of about $1.19 million worth of short positions.
Recent data at press time indicates a prevailing bullish sentiment, potentially leading to the liquidation of higher short positions.
Overall, the cryptocurrency market has dipped by 1.2%, with major cryptos like Bitcoin, Ethereum [ETH], and Solana [SOL] witnessing declines of 4%, 4.9%, and 3% respectively in the past 24 hours.