Aave (AAVE) price shows a bearish signal, is a sell-off happening?
The price of Aave (AAVE) has confirmed the previous support as resistance. It could decline to the yearly low at $51.
Key Support Level
The price of Aave (AAVE) has been declining since reaching its yearly high at $95 on February 19. During this process, the price has bounced off the 0.618 Fibonacci retracement level three times (green arrows), but each bounce has formed a lower high. Subsequently, AAVE broke below this support level and confirmed it as resistance on May 29 (red arrow).
This action is significant because the 0.618 Fibonacci retracement level is often a point where a correction ends. Breaking below it could lead to a 100% retracement.
The daily RSI indicator is decreasing below the 50 level and sloping downward, indicating a bearish trend.
Therefore, the price of AAVE could continue to decline to the support level at $51, where the upward movement began earlier this year.
Ascending Channel
The 4-hour chart supports the prospect of a price decline based on the daily timeframe. The AAVE price is currently trading within an ascending channel, which is a bearish pattern that often leads to breakdowns in most cases.
The fact that the price is trading in the lower area of the channel is reinforcing this possibility.
Therefore, the price of AAVE may break below the channel and continue to decline.
Conclusion
The most likely outlook suggests that the price of AAVE will break the current short-term pattern and continue to decline. The potential target for this downward movement is $51.
This perspective will be invalidated if the price reclaims the 0.618 Fibonacci retracement level at $68.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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