For the past couple of months, Aave [AAVE] has seen strong support around the $140 mark from its bullish investors. The altcoin now has its sights set on reaching $200 and potentially surpassing that level, as indicated by the price charts on longer timeframes.
Despite AAVE’s struggle to maintain $140 and recover to $150, Bitcoin has been steadily climbing higher over the last six weeks. This has resulted in a low 30-day correlation of +0.29 for AAVE, reflecting the different trajectories of the two digital assets.
However, there is no need for long-term investors to be disheartened at this point.
Indications of a Prolonged Uptrend Yet to Materialize
An analysis by CryptoCrypto revealed that the netflow data for the past week and month did not provide strong support. With -435 AAVE outflows totaling a modest $61k and a +16.66k AAVE 30-day change indicating inflows of $2.3 million into exchanges, the market sentiment seemed somewhat mixed.
Further data from Santiment indicated that token circulation remained subdued in the recent months, suggesting limited movement between addresses compared to the active selling seen in mid-July.
Consequently, it appears unlikely that significant selling pressure will emerge in the near future.
The declining MVRV ratio, which points to a loss for 3-month holders on average, might create some selling pressure as the price approaches $160. However, this scenario also indicates that profit-taking activities are not likely to impede the ongoing bullish momentum.
While the bullish momentum has already kickstarted, its true extent may become more evident on the weekly timeframe. For example, the sustained uptrend in the mean dollar invested age (MDIA) suggests a period of stagnation, with a potential decline indicating increased activity and new investor participation. This could pave the way for a sustainable uptrend in the future.
Insights from AAVE’s Higher Timeframes
On the weekly chart, a downtrend was observed in the latter part of 2021, extending into 2022. The $100-$120 range emerged as a significant resistance zone that remained unbroken for 805 days.
Breaking this long-standing consolidation pattern in mid-September was a pivotal moment, marked by surpassing the previous high of $153 and maintaining a weekly close above that level. Despite facing resistance at $180 and defending the $140 support zone, AAVE showed signs of bullish intent.
The market structure shift six weeks ago indicated a shift towards bullish sentiment. Looking ahead, targets like $290, $400, and even the previous all-time high of $661 could be attainable. A potential decrease in MDIA could serve as an early signal that AAVE is gearing up for a substantial upward trajectory.