The Rollercoaster Ride of Aave’s Price
Aave (AAVE) has had a wild month, soaring over 103% from a low of $45.60 on June 18 to touch nearly $95.50 on July 15. It’s like watching a toddler on a sugar high — thrilling but a bit scary! But is this rally sustainable, or are we looking at a potential meltdown?
Testing the Waters: Inflection Levels in Play
As AAVE’s price swings into the summer sun, it finds itself at a crucial resistance point, much like a college student facing an enormous final exam. Historically, this level has sparked notable downward moves, with sharp pullbacks of around 20% to 30% following similar situations in June. The latest test on July 9 begs the question: will Aave pass or fail this crucial test?
Bear Flags: Not Just for Caution Signs
The chart is painting a picture of a potential “bear flag”, a pattern that suggests more trouble lies ahead for our brave Aave. This flag represents exhaustion in bullish momentum. If AAVE can’t break through and retreats instead, a trip back to the lower trendline near $67.75 might be on the horizon — a daunting thought for AAVE hodlers.
- Resistance looming: July highs around $95.50
- Key support: Possible pullback to $67.75
Bearish Breakdown Scenario
According to technical analysis, if AAVE dips below $67.75, it may be heading for a nosedive down to $35.50. Nothing says “party’s over” like a crash of that magnitude! This downward trajectory could represent a loss of over 60% from current highs, turning AAVE enthusiasts into AAVE mourners.
The Optimistic Rebound
However, it’s not all doom and gloom. A successful rally above the bear flag’s upper trendline could spark a bullish revival, with aspirations to reach the $115-$120 range. So, will AAVE bounce back like a rubber ball or fall flat like a pancake? Stay tuned!
GHO: A New Hope for AAVE?
Half of AAVE’s recent rally can be attributed to a proposal for a new stablecoin called GHO. Cryptocurrencies have a funny way of bringing the community together — and apparently, creating coins is a great icebreaker. This overcollateralized stablecoin aims to boost adoption in the DeFi space. Is GHO the secret sauce for AAVE’s next-level success, or just another flavor of the month?
Final Thoughts
As traders gear up for what’s next for AAVE, a prudent approach is to keep an eye on the RSI levels. Treading dangerously close to the overbought territory with a current reading just under 70, a correction could very well trigger the bear flag scenario. That’s why it’s crucial to stay sharp and do your homework!
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