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The cryptocurrency market is struggling to drive a sustained recovery trend as Bitcoin price waver around the $100k milestone. A potential breakdown in BTC could drive a post-rally correction in most major altcoins including $AAVE price. The recently heightened social volume associated with leading decentralized finance (DeFi) protocols has a higher potential for a bearish reversal.
According to Coingecko data, the $AAVE price exchange hands at $355.6 with an intraday loss. Meanwhile, the asset market cap is at $5.35 Trillion, while the 24-hour trading volume is at $19.2 Billion.
- Crypto analysts hint that heightened sentiment and social volume could lead to a short-term pullback in $AAVE price.
- The oversold ADX indicator signals exhausted bullish momentum, and a potential reversal is near term.
- The 20-day exponential moving average has acted as a suitable pullback support for crypto buyers.
Strong Crowd Sentiment Drives $AAVE Price to Multi-Year High
The cryptocurrency $AAVE is gaining significant attention, as highlighted by the rising social volume and overwhelmingly positive sentiment within the community. According to data shared by trader Ali Martinez, these metrics indicate a surging interest in $AAVE, driven by strong crowd enthusiasm.
However, his analysis also warns of potential market dynamics, where heightened sentiment could precede a short-term price pullback, as markets often tend to counter prevailing trends. The $AAVE price rally has recently hit a 3-year high of $388.5, which could witness a notable correction to recuperate the bullish momentum.
The social volume and positive sentiment around $AAVE are soaring. With the crowd’s growing focus on #$AAVE, a brief pullback might be on the horizon, as markets often move against popular sentiment. pic.twitter.com/O9JgwhqfBO
— Ali (@ali_charts) December 13, 2024
$AAVE’s Recovery Signals Potential Exhaustion
Over the last three weeks, the $AAVE price rallied significantly from $151.8 to $390, accounting for a growth of 157%. The recovery trend, backed by increasing trading volume and social activity, has breached another key resistance of $348.
If the flipped support holds, the coin buyers could raise the asset by 27% up to hit the $448 barrier.
However, unidirectional rallies are less likely to be prolonged until fueled by supporting news. The current recovery trend stretched far from the fast-moving daily EMAs, such as 20 and 50, hints at an overextended rally.
Similarly, the momentum indicator ADX spike to 37% indicates the market buyers could soon hit exhaustion and drive a bearish reversal.