Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Aave has been on a moon mission on the charts since the launch of AAVE V3 in mid-March. The short term market structure has been strongly bullish. The higher time frames also showed that the break past the $200 area was technically significant. It seemed plausible that Aave would maintain this momentum for the next few days.
In deep blue is a trendline resistance dating back to August 2021. In recent days, this nearly eight-month trendline resistance line was finally broken. It was a bullish development. Since mid-March, AAVE has had a bullish outlook on the charts, and this development has further reinforced the bullishness.
Fibonacci’s retracement and expansion levels (yellow) were plotted based on the move of AAVE from $158.6 to $210 and showed the expansion levels of 61.8% and 100% at $241.8 and $261. 4 layers. The price was recently knocked down at the $261 level.
$241, $224 and $210 are places where AAVE could end its retracement and move up again.
The hourly RSI stayed above the neutral 50 showing that bullish momentum was still present. The Stochastic RSI fell into oversold territory and all things considered, they suggested a bounce could occur at the $241 level.
The CMF was well above +0.05, while the OBV has also been rising in recent days. We can therefore conclude that there was strong buying pressure at the time of going to press.
The momentum and volume indicators provided a positive view of bullish price developments for the coming days. A retracement to $224 or $210 cannot be ruled out, but at the time of writing, it looked like the $240 area could see AAVE bounce higher.
Even in the case of a deeper correction towards $200 for AAVE, the higher time frame charts suggested that bulls were still in control. The move above $150 and $192 was a key event that tipped the balance in favor of the bulls and marked the $200 area as a demand zone with buying opportunities. In the north, a breakout over $260 will set the next $312 (200% extension) target for AAVE.