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Will AAVE break through the bearish influence and rally to the psychological mark of $200?
As the crypto market experiences a slower day after a bullish start to the week, DeFi tokens are undergoing significant changes. AAVE, a DeFi lending and borrowing protocol, appears poised for a potential trend reversal.
AAVE’s pullback phase, testing a crucial resistance trendline, is nearing its conclusion. Could this breakout spark a rapid 30% rally for the token?
AAVE Tests Crucial Resistance Near $157
In late September, AAVE’s attempts at bullish recovery struggled to break through a significant resistance trendline, encountering bearish pressure around the $176 level. Meanwhile, solid support at $137 has consistently provided a cushion, resulting in multiple bullish reversals.
The ongoing recovery has seen a 14% increase from $137.79 to $156, yet it again falls short of surpassing the resistance trendline. In addition to the supply line, the 50% Fibonacci level at $157 presents another barrier.
Currently, the bearish reversal from the overhead trendline has resulted in a 2.68% drop, testing the 20-day EMA on the 4-hour chart. However, the recent bullish cycle has led to a golden crossover between the 50 EMA and the 200 EMA. Additionally, the merging of the 50 and 100 EMAs hints at a potential crossover if bullish momentum continues.
The 4-hour RSI has struggled to exceed the overbought threshold, leading to a decline below the 14-day SMA. As a result, indicators suggest a high likelihood of an upcoming breakout.
Will AAVE Reach $200?
If the uptrend can successfully breach the overhead trendline amidst a surge in the crypto market, AAVE could reach $200. Supporting this bullish trend, Fibonacci levels indicate potential breakout rally targets at the 100% and 1.618 levels, positioned at $176 and $200, respectively.
Conversely, the recent downturn has tested the $137 support level for the fourth time in just 30 days.