Aave (AAVE) is currently grappling with a $116 resistance level, a crucial stage that could lead to a significant 40% rally, potentially pushing AAVE’s price to $162. However, investors are cautioned to be vigilant as a break below the $107 support level, followed by its transformation into a resistance barrier, could invalidate the bullish outlook.
As the bull run gains momentum, altcoins including Aave are delivering substantial returns for investors. Ethereum‘s recent rally, following a period of relative inactivity, has positively influenced the performance of Ethereum-related altcoins.
Initially led by newly launched tokens like PYTH, PENDLE, and TIA, the momentum has spread to established altcoins such as UNI, ETC, and AAVE. The crypto community refers to this trading strategy as “ETH-beta,” indicating a correlation with Ethereum’s rise.
Aave holders found themselves at a critical juncture when the price fell below the $116 and $107 support levels on May 9, 2022. Despite several attempts to drive the altcoin higher, AAVE faced resistance, notably remaining resilient when Bitcoin experienced a drop on December 28, highlighting the ongoing struggle to establish $116 as a support level.
For strategic investors, accumulating altcoin AAVE at $107 during an intraday dip could be a potentially rewarding yet risky bet, based on the expectation that Aave’s price will successfully convert the $116 barrier into a support base. If successful, the rise from $116 to $162 would represent a significant 40% gain.
Analysis of the AAVE/USDT daily chart indicates that a drop below the $107 support level, turning it into resistance, would signify a failure of the potential uptrend. In such a scenario, AAVE could plummet to $95, triggering a deeper dip and potentially falling to $75, which would collect liquidity below the October 27 low, invalidating the optimistic outlook. Investors are advised to closely monitor the critical $116 and $107 levels, which are key to determining AAVE’s near-term trajectory, presenting both opportunities and risks.
