In a week marked by market turbulence, Aave (AAVE) has managed to capture the attention of investors with its remarkable performance. Despite the altcoin market facing renewed supply pressures due to Bitcoin‘s (BTC) price retreating from $70,000, AAVE has displayed notable resilience. An 8% increase from its current price could pave the way for a significant breakout.
AAVE’s Recent Performance and Indicators
Throughout July, as the cryptocurrency market began to recover, AAVE saw its price surge from $71 to $107.13, a 50% jump. This marks the second significant recovery from the $71 level in three months, indicating sustained investor interest despite market dips. The double bottom formation has resulted in a ‘W’ shaped structure, emphasizing the strength of the support level.
The Relative Strength Index (RSI) further supports this positive outlook by showing increased demand pressure with fewer dips. Additionally, the 50-day Exponential Moving Average (EMA) is poised to cross above the 200-day EMA, signaling a potential buying opportunity. AAVE trading above its daily EMAs (20, 50, 100, and 200) reinforces this bullish scenario.
Scenarios for AAVE’s Price Movement
Currently trading at $106.5, AAVE has seen a daily increase of 1.2%, pushing its market value to $1.58 billion. With the double bottom formation in play, AAVE could potentially rise another 8% to challenge the $114.7 resistance level. The predicted target for this formation is calculated by adding the distance between the support and neckline to the breakout point, forecasting the potential extent of the rally.
Key Takeaways for Investors
- AAVE’s double bottom formation suggests a potential bullish trend.
- The RSI indicates increasing demand pressure, adding confidence to the positive outlook.
- Watch for the 50-day EMA crossing above the 200-day EMA as a buy signal.
- AAVE must break the $114.7 resistance for further upward momentum.
If this resistance is converted into a support level, AAVE’s post-breakout rally could extend to $157, marking a 38% increase. Intermediate resistance levels at $134 and $153.7 might challenge this ascent. However, if Bitcoin continues to encounter difficulties around the $70,000 level, AAVE, along with other major altcoins, might lose momentum. A failure to surpass the $114.7 resistance could see AAVE’s price revert to $71, invalidating the bullish scenario.