AAVE/USD price analysis: Can this upwards momentum be sustained?

Cryptocurrency heatmap by Coin360

The overall cryptocurrency market is in the red today, with much of the recent gains that were seen over the last 24 hours being wiped out.

Bitcoin (BTC) has fallen below its crucial support level of $35,000 but, surprisingly, Ethereum (ETH) has managed to hold its support of $2,000.

BTC dominance has fallen slightly over the last 24 hours from 47.6% to 46.3% – a potential indicator that the flagship cryptocurrency may not be leading the market quite as much as some previously thought.

Aave currently ranks at #29 on CoinMarketCap with a circulating market cap of $3.055 billion. Its 24 hour trading volume has remained relatively constant, increasing by 0.85% with a volume of $370 million. 

Aave price over the last 48 hours: Bullish crossover on the moving averages

Over the last 48 hours, Aave has seen some incredible volatility moving between lows of $220 and highs of $252 – a price movement of nearly 15%.

What is important to note is the bullish crossover of the moving averages (MA). This is when the shorter period MA crosses the longer period moving average to the upside. It signifies a possible trend reversal in the market but should always be taken with a pinch of salt.

Aave is now trending near its critical resistance at $250, which has proven to hold significant value in the past. It has tested this area twice with both attempts failing to successfully break this area.

Furthermore, Aave also appears to be forming a ‘double top’ pattern, which normally indicates that a downwards movement in price is to come. If this does occur, the area of interest would be $220 which is where the trend line and horizontal support line intercept. It is here where a possibility lies for Aave to retest this area before moving towards the upside again. 

Aave/USD price chart by Tradingview

Aave/USD 4-hour chart: Is the downward pressure starting to ease?

While the short-term outlook might have looked slightly bullish, it should be noted how bearish it appears from a macro perspective. It faces much harsher resistances at $270 and $300 respectively, before it even approaches its longer term trend line which it has failed to break on several occasions.

Furthermore, while the price remains below the 200 MA, the market sentiment will always remain bearish biased, with investors hesitant to gamble and invest in the currency. Aave would require a significant increase in buying volume in order to break these areas. If broken, even more purchasing volume would be required to hold these levels as support. 

Aave/USD price chart by Tradingview

Source: coinrivet.com