Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice.
- Volume indicators showed mild buying pressure
- The market structure slightly favoured the bears
Aave (AAVE/USD) has been on a rollercoaster ride over the past year, trading at $146 on 1 March 2022, then dropping to $52.4 on 1 January 2023, and finally trading at $83.2 on 1 March 2023. At press time, AAVE/USD was valued at $72.7 after posting 3.6% gains in the last 24 hours. This analysis will examine key technical indicators on the 1-day timeframe, including the Relative Strength Index (RSI), Bollinger Bands, On-Balance Volume (OBV), Chaikin Money Flow (CMF), Moving Averages, MACD, and Parabolic SAR.
Read Aave’s [AAVE] Price Prediction 2023-24
AAVE was trading within a range from $77.4 to $91.2 between 18 January and 3 March. After falling below the range lows, the market structure took a bearish shape. Around 15 March, AAVE climbed to $81 and formed a lower timeframe range from $73.4 to $81.7. However, in recent days, it has fallen under this range too. The $77-$83 zone represented a bearish order block, while the $64.7-$70 zone served as a support in the form of a bullish order block.
Technical indicators reveal the possibility of a sustained decline in AAVE prices
Bitcoin (BTC), at press time, faced a critical resistance at $28.7K. Given the positive correlation between Aave and Bitcoin on the price charts, it’s crucial to consider how this resistance might impact the AAVE/USD pair.
Aave is a leading DeFi (decentralized finance) protocol offering a range of innovative features such as flash loans and fixed-rate loans, with strong community backing and governance token for long-term investors. The Federal Reserve’s recent 25 basis point interest rate hike and anticipated slower economic growth in 2023 could result in less money flowing into risk assets like BTC and AAVE.
Key Highlights –
- RSI at 46.31, suggesting a neutral market sentiment
- Bollinger Bands converging, indicating a potential price breakout
- OBV at 11.8M, flat for the past two weeks
- CMF at +0.06, indicating mild buying pressure
- Moving Averages: 20 SMA at 74.6, 50 SMA at 78.3 forming a bearish crossover in early March
- MACD below zero at -1.6 and -1.4, with potential for a bullish crossover
- Parabolic SAR’s dots above price candles, signalling a short-term bearish trend
- MFI at 57.4 – A sign of a balanced market
Neutral to slight bearish leaning for AAVE in coming weeks
The RSI stood at 46.31, indicating a neutral market sentiment for AAVE/USD. The Bollinger Bands were converging, suggesting that a price breakout could be imminent in either direction. The OBV remained flat at 11.8M for the past two weeks, highlighting no significant change in buying or selling pressure.
The CMF had a reading of +0.06, pointing to mild buying pressure in the market. Moving averages showed the 20 SMA at 74.6 and the 50 SMA at 78.3, both above the press time price of $72.7. This was a sign of bearish sentiment in the short term. The MACD was below zero at -1.6 and -1.4, but could form a bullish crossover if the momentum changes in favor of the bulls. The Parabolic SAR’s dots were above the price candles, suggesting a downtrend.
Considering the technical indicators, AAVE/USD faces significant bearish pressure with the 20 and 50 SMA levels acting as resistance.
How much are 1, 10, or 100 AAVE worth today?
In conclusion, AAVE/USD, at press time, presented a neutral trading signal, with mixed signals from the technical indicators. Traders should closely monitor Bitcoin’s performance, as its critical resistance at $28.7k could impact the alt’s price action. Additionally, traders should keep an eye on key support and resistance levels, as well as the aforementioned indicators, to determine the future price trajectory.