The price of Aave (AAVE) is currently trading within a long-term symmetrical triangle pattern. A breakout from it could determine the future trend.
On April 28, Aave announced that the launch of their stablecoin GHO is very close. This could have a positive impact on the AAVE price in May.
AAVE is preparing for a major move
The Aave (AAVE) price has been trading within a symmetrical triangle pattern since hitting a yearly low of $45.8 in June 2022. This is a neutral pattern, so both a breakout and a breakdown are equally likely.
After being rejected by the triangle’s resistance line ($85) last week, the price is currently trading in the middle of the pattern. The weekly RSI indicator is currently showing a neutral signal as it moves around the 50 level.
If a breakout occurs, the AAVE price could rise to the next long-term resistance level at $120. While a breakdown would send the price down to the all-time low of $30.
As the triangle has been in existence for 315 days, the resulting move after a breakout could be very strong.
Short-term pattern supports the possibility of a breakout
The daily chart shows that AAVE has been trading within a descending parallel channel since reaching a yearly high of $95. This is a bullish pattern that often leads to a breakout in most cases.
After being rejected by the channel’s resistance line on April 18, the AAVE price has successfully flipped the channel’s midline as support over the past few days.
Additionally, the channel’s midline coincides with the 0.618 Fib level of the early-year uptrend, where corrections often end after an uptrend.
Therefore, the bulls are likely to make another effort to break above the channel soon.
If successful, this would also help the price break out of the long-term symmetrical triangle pattern.
Conclusion
Both technical and fundamental signals support the continued rise of AAVE. The nearest target is found at $85, while the next targets are $95 and higher to $120.
This bullish outlook may be invalidated if the price breaks below the 0.618 Fib 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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