Aave hints at invalidating bearish triangle structure, eyes 25% run-up

• AAVE posts 19% gains in the last 24 hours
• AAVE/USDT looking to break out of bearish triangle structure to chart further upsides
• Bullish pressure could lead the DeFi lending asset to a critical Fibonacci retracement level

JAIPUR (Coinchapter.com) – Aave is leading the decentralized finance (DeFi) protocol leaderboards at the moment in terms of growth. But its native blockchain asset, AAVE, too, is riding high on market gains. In a rally that began during the late noon hours of the previous London trading session, the DeFi cryptocurrency logged near 20% gains.

With the upside move, the AAVE/USDT rate invalidated the bearish triangle technical setup, which restricted its price action till Sunday, July 25. As a result, buying pressure is intense and indicates further upside for the DeFi crypto asset.

Related: AAVE price keeps pushing higher but for how long?

AAVE Daily Technical Setup

The AAVE/USDT has broken above the upper bound of the bearish triangle on the daily chart. In doing so, the spot pair is on the verge of retesting the $342.62 price level. The same coincides with the 50% Fibonacci retracement level.

Fibonacci retracement helps forecast the near-term support and resistance levels for any asset. The technical analysis tool is derived from Fibonacci numbers. It is a mathematical number system propounded by the erstwhile Italian mathematician of the same name. Fibonacci numbers, in turn, attribute their origins to the Golden Ratio. It is a number that defines the aesthetics of everything that we see around us.

One needs to consider the highest and the lowest spot price of an asset (during uptrend/downtrend) to calculate Fibonacci retracement levels. In AAVE’s case, the lowest point of the uptrend coincides with the November 2020 lows of $27.22. Conversely, the highest point coincides with the all-time high of $658.03 that the AAVE/USDT pair achieved before the May dump.

Related: DeFi Token Aave Sees 50% Daily Surge To Reach ATH

Between $27.22 and $658.03, the Fibonacci indicator has worked out the critical retracement levels. The 38.2%, 50%, and 61.8% retracement levels provide vital insights for AAVE’s future price action (and for any other financial asset as well). And can help traders/ investors decide their entry and exit points. Why? Because the Golden Ratio is appropriately calculated in these three percentages.

For AAVE/USDT, the ongoing bullish pressure hints at the restest of the $417.06. The price level is approximately 25% upside from current prices and coincides with the 38.2% Fibonacci retracement level. This setup stands to play out only if bulls manage to close above $342.62, which coincides with the 50% Fibonacci retracement level.

AAVE risks dropping to support at $268.19 (61.8% retracement level) if bulls run out of steam and sellers take over.

Please leave this field empty

Subscribe Today
for our Weekly Newsletter

Free Weekly Crypto News without the spam.

Check your inbox or spam folder to confirm your subscription.