- 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.
