One of the big names in Challenge (Decentralized Finance) is heavily impacted by this raging bear market. Review of technical objectives.
AAVE – Weekly chart: Fibonacci to the rescue
Since the start of 2022, AAVE saw its price melt like snow in the sun. The thing is, this project saw a huge chunk of cash flowing into the dollar for take shelter from this medium-term downtrend.
This also applies to the entire market for cryptocurrencies. In effect the capitalization of dollar-backed cryptocurrencies increased by 133% at the time these lines are written.
From a technical perspective, this downside correction has found support on the Fibonacci golden ratio, the 161.8% extension. Situated at $50.19, it represents the major support from a medium-term point of view. This is confirmed by strong volumes during the june breakout test, which turned out to be unsuccessful. And the extension of 100%situated at $116.88, is the main resistance. Prices are therefore stuck between these two key technical points.
From a point of view Ichimokuthe Japanese indicator will give a first bullish alarm signal by a breakout of the Tenkan weekly. This is currently located at $88.9.
Finally, the indicator MACD vsmaintains its buy signal with a bullish convergence of its two exponential moving averages.
AAVE – Daily chart: Indecision remains total
For now, the short-term situation remains very uncertain. Prices, for a month now, give no signal and show that operators do not want to take any risk.
AAVE has localized support at $67.6. The main resistance is dictated by the indicator Ichimokuand his daily kijun. Indeed it continues to compress AAVE on this medium. If it breaks, it will be necessary to consider a return to $53.7. On the other hand, if a strong bounce occurs, then the next technical resistance is located at $83.7.
The meaning that will AAVE will mainly depend on an evolution of the current situation, macroeconomics and geopolitics. If the economic figures do not evolve in the right direction, watch out for the sharp correction that awaits AAVE, just like all the financial markets. Only time will decide and it remains for now it remains vital to remain cautious.
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