The Aave price has taken an important step in recovering from yesterday’s meltdown and reclaimed a critical trend. However, today could decide its fate.
Aave is last trading at $217.75, up $11.69 (+5.67%)
In a report on the 13th of June, entitled ‘It’s a long way down from here”, ‘ I discussed Aave’s increasing negative price action. My original target price of $206.00 looked to be pinpoint perfect up until yesterday.
On Monday, Aave traded to $206.50, the area I considered to be crucial. However, following Bitcoin and Ethereumms disastrous performance, Aave soon lost this support.
Despite trading as low as $165.05 as yesterday’s sell-off intensified, Aave managed to close at $206.12. This may prove to be a key development.
In the last 24-hours, Bitcoin has added a new big figure and is once again trading with a $30 handle. Furthermore, the BTC strength has continued and is now approaching $34,000.
Similarly, Ethereum has reversed yesterday’s losses and changing hands just north of the important psychological threshold of $2,000.00
The daily chart clearly shows the significance of the trendline at $206.00. If the Aave price can remain above this trend in today’s session, it would validate the price reversal. Moreover, bulls may then target the horizontal resistance of $277.00.
However, the broader market remains fragile, and investors are undoubtedly scarred from the latest bout of liquidations.
Therefore, even in light of the latest reversal, Aave is still not out of the woods. Should the price succumb to weakness, resulting in trading below $206.00, it could be subject to another round of selling.
Traders should take cues from Bitcoin and Ethereum as they will pave the way for the altcoin’s next move.
For now, bulls may breathe a sigh of relief. Nonetheless, the crypto market has a long day ahead of it and as we know, anything can happen.
Follow Elliott on Twitter.
