Aave has been on a downtrend since April amid wild market volatility. Major altcoins have extended their losses due to a massive sell-off across the cryptocurrency industry. Over the past week, the coin has made lower lows and showed strong selling pressure.
Altcoins have also experienced high trading volumes, which are associated with increased selling pressure. It also added to the decline in the asset’s market capitalization on the one-day chart.
A decline from current price levels means that Aave may soon be eyeing the $50 support area. Aave has lost more than 51% in the past week and has been one of the biggest losers in the industry.
Aave Price Analysis: One Day Chart
At the time of writing, Aave is priced at $74.80. A year ago in January, the altcoin was trading at this price level. Aave’s downtrend appears to be strong, as the altcoin just broke below its long-term support line for over a year.
The possibility of a price reversal cannot yet be ruled out as the altcoin has broken below the downtrend line. Usually after a sharp decline, the price turns around. If prices recover, Aave could have a $111 price target.
Another decline from current price levels would see the altcoin trade near the $61 support line before hovering in the $50 range. As mentioned above, volume is up and in red, indicating a bearish market.
Aave is in the midst of a massive sell-off, and the coin has not seen the same selling pressure over the past year. The reading shows that there is excessive bearish pressure in the market. On the RSI, the indicator is close to 20, which means the coin is oversold.
Aave last hovered around this point in December 2020. Bollinger Bands, which show volatility, show the potential for volatility. The band widens, indicating increased price volatility.
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Awesome Oscillator depicts the price momentum of the market. On the one-day chart, the indicator is below the half line. It shows an enlarged red signal bar, which is a sign of bearish price action. Aave will try to show a recovery on the charts only if buyers resurface.
Opportunities for a recovery in the near-term trading session appear to be weak due to the need for the strength of the broader market. Chaikin Money Flow shows capital outflows and inflows.
On the chart, the indicator sits below the half line and continues to move south as capital outflows outpace capital inflows.
Featured image from UnSplash, chart from TradingView.com