AAVE Analysis – The nugget of Decentralized Finance ready for the start?

The AAVE cryptocurrency, along with its Dapp (decentralized application) of the same name, is one of DeFi’s biggest protocols. Indeed, with its 15 billion TVL (Total Value Locked), this giant of the sector, what is more multi-chain, clearly has a bright future ahead of it. But does this potential appear under the magnifying glass of the technical analysis of the price charts? Let’s see it together today!

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AAVE / Bitcoin: An area of ​​uncertainty

The AAVE had a nice rally, during the altseason which started at the beginning of 2021. Indeed, the price of the cryptocurrency went from 0.0025 BTC in December 2020, to an ATH around 0.016 in May, which makes an increase by 461%!

Cryptocurrency then severely corrected during the May crash, to find support at 0.005 BTC, which held out until October, only to begin a slow and painful descent. This support was retested, as resistance, which makes it an important point to watch out for.

We also had a buying reaction, on an area that served as resistance as well as support at the end of last year: 0.0033. If buyers regain control here, a target of 0.0057 would seem consistent to me

If this support breaks, the next support will be 0.0025, which has already reacted several times, so it seems relevant to me to expect a reaction if we return to it.

AAVE / USD: Long-standing support

AAVE / USD technical analysis

AAVE is currently evolving in a range, within which I would define $ 450 as the upper bound, $ 310 as the middle of the range (the middle of the range is always to watch) and $ 150 as the lower bound.

In my opinion, the invalidation is quite clear: a net crossing of $ 150 on the downside (a daily close).

Be careful that we do not simply scratch the liquidity of stakeholders below the lower limit before reintegrating, that would then be a strong buy signal. Whales and other strong hands in the market like to use our stop-losses so that they can buy large volumes without having a significant impact on the market.

Zoom in for more precision.

AAVE / USD technical analysis in detail

By zooming in more, we can see a price to which the AAVE has already reacted a lot, the $ 220. So I expect a reaction there. In the short term, a range between $ 220 and $ 160 seems consistent to me, it remains to be seen whether the exit will be up or down. As said before, currently the invalidation is very clear and could offer a good opportunity.

AAVE is an asset that seems to me to be very undervalued, in terms of fundamentals or technical analysis. The strict invalidation zone so I have talked a lot presents an ideal zone to place a Stop Loss and you won’t absolutely must not deviate from it if you are in a trading logic. For an investment approach, these prices also seem to me to be suitable for the implementation of a DCA (Dollar Cost Average) strategy in order to smooth the entry, while keeping liquidity in case the AAVE would go higher. low.

As I like to point out, because it is an often overlooked point, your risk management must be strict and your trading plan must be defined in advance, and you must not deviate from it.

I wish you all excellent trading!

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