Aave’s token has been caught within a slow and steady uptrend throughout the past few days and weeks. It has been one of the beneficiaries of the recent rebound in the DeFi market, as it was previously caught within a firm downtrend.
This has since reversed, but the cryptocurrency is now struggling to maintain its momentum as it reaches a critical resistance level that has proven to be quite strong on multiple occasions.
A further rejection at this level would be grave and cause it to see further downside, but relative strength today across the aggregated DeFi market may help bolster it.
The DeFi market’s strength is quite surprising, as Bitcoin has been flashing signs of weakness while altcoins like Chainlink, Aave, and Yearn.finance are all stable today.
While looking at Aave’s price action, one analyst explained that he is closely watching to see how it reacts to a key resistance level that has been suppressing its price throughout the past couple of months against its Bitcoin trading pair.
Although he notes that its price may soon begin stalling, he also believes that its low time frame chart is extremely bullish.
Aave’s Uptrend Stalls as Bulls Fail to Break Key Resistance
At the time of writing, Aave is trading up over 5% today at its current price of $56.50. This marks a notable upswing from weekly lows of $26.00 that were set just a few days ago.
The immense rally from these lows stalled as soon as its price reached $60.00, and each test of this level throughout the past few days has catalyzed rejections.
Unless it rallies past this level, another rejection here followed by a stronger downside movement could mark this as a local top for the cryptocurrency.
Analyst: Aave Nearing Critical Resistance against BTC
He notes that while a high time frame rejection at this level would be significant, it is flashing some signs of bullishness on lower time frames.
“AAVE: Impressive bounce, however it’s clear that we’re beginning to trend near HTF resistances. Real test will come at 0.0041 sats, personally I think that’s where price stalls. LTF still looks bullish.”
Image Courtesy of Bagsy. Source: BTCUSD on TradingView.
Where it trends in the near-term should depend largely on how it reacts to its USD and BTC resistances in the days ahead. A break above these levels could help further bolster the ongoing upswing seen in the DeFi sector.
Featured image from Unsplash. Charts from TradingView.