The Aave price has taken a back step this week, reversing 20% of the last month’s gains. Furthermore, the technicals may be starting to crack. Nonetheless, the Decentralised Finance leader is still 130% higher than in June, although that performance may soon be under threat unless it can reclaim its uptrend.
Aave (AAVE) sits atop the DeFi leader board with more than $14 billion in Total Value Locked (TVL) assets. And as a result of investors, love/hate relationship with crypto finance has been extremely volatile this year. During the first two months of 2021, the AAVE price soared to its former all-time high at $628.65 before halving the following month. However, when the broader market set records in April and May, Aave followed suit, achieving its personal best of $707.67 on May 18th. Of course, the crypto market suffered a substantial setback May through June, and the price cratered 77% to $165.00.
However, in the last month, altcoin session #2 has seen a rush of capital back into crypto. And since reversing from $212 on the 20th of July, the token has been trending higher. However, yesterday, the Aave price may have broken down from the trend.
The daily chart shows signs the recent rally may be rolling over. Firstly the price has slipped out of its rising trend channel after breaching trend support at $382.00. Furthermore, the Moving Average Convergence Divergence (MACD) indicator flashes a sell signal, suggesting that momentum is deteriorating. As well as the Relative Strength Indicator pointing south.
This is likely to exert downward pressure on the price, and a test of July’s $354 high is likely. And should this fail to stem the decline, an extension to $300 is possible. However, this bearish view becomes invalid if Aave can reclaim trend line support-turned-resistance at $382. Successful clearance of this level opens the door to the top-end of the ascending channel and the important $500 threshold.
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