In the past week, Aerodrome Finance [AERO] has experienced a significant rally of 39.18%, bringing it close to the $2 resistance range. This level has previously acted as a barrier in March and is proving to be a challenge once again.
Can Aerodrome Finance Turn $2 into a Support Level?
Looking at the market structure within the 1-day timeframe, it is evident that the bullish sentiment remains strong. The bullish trend was established on September 18th when Aerodrome Finance surpassed the previous lower high at $0.75, and since then, the trend has not shifted to bearish.
In October, the bulls faced resistance in the $1.3-$1.5 range, which was eventually broken through in the latter part of November, accompanied by heightened trading volume. Despite a brief decline in the OBV at the start of November, the indicator has been showing signs of recovery over the past ten days, surpassing the local highs of the last two months, indicating significant buying pressure.
With the RSI currently at 76, signaling overbought conditions, there is no immediate indication of a pullback looming.
As of the latest update, the $2 psychological resistance level coincides with a bearish order block from March, creating a challenging hurdle for Aerodrome Finance buyers attempting to push through this resistance.
Anticipating a Short-Term Price Correction?
Analysis of the liquidation heatmap for the past week reveals a notable cluster of liquidity around $1.4, ranging from $1.34 to $1.52.
Interestingly, this liquidity zone aligns closely with the bullish breaker block (cyan box) outlined on the daily timeframe around $1.5, indicating a potential revisit to this area.
Further examination of lower timeframe liquidation levels suggests that $1.8 and $2 are the primary magnetic zones towards which Aerodrome Finance prices may gravitate.
Among these levels, the $2 zone seems particularly inclined to be breached in the coming hours before a reversal occurs.
While the extent of the price dip remains uncertain, it is worth noting that AERO boasts robust demand zones around $1.5 and below, with a drop below $1.72 indicating a potential bounce back towards the $1.34-$1.52 range.
Disclaimer: The opinions expressed in this content are personal views and should not be considered as financial advice, investment recommendations, or trading guidance.