AAVE Price Takes a Breather: Is It Time to Buy the Dip?
The price of AAVE has fallen 3.42% today, taking a break after eight consecutive days of rallying. Yesterday, AAVE experienced a surge of 5.94%, breaking above the important 100-day Exponential Moving Average (EMA). Currently, AAVE is retesting support around $62, which aligns with its 100-day EMA and a previous trading range.
This consolidation phase is considered healthy as AAVE aims to establish a base following its upward trend. Although the price has recovered slightly from the intraday low of $62.09, it is crucial for traders to see a definitive close above this level with a green candle to confirm it as support.
AAVE is currently trading within a range between the 50-day EMA at $59.66 and the 100-day EMA at $62.24, with the 20-day EMA trailing closely behind at $58.50. The clustering of these key moving averages indicates the potential for a significant directional move in the near term.
The Relative Strength Index (RSI) of AAVE has retreated from yesterday’s overbought reading of 71.34 to a more moderate level of 63.20. This pullback often precedes consolidation or a minor correction, which aligns with today’s price action.
Although the MACD histogram has slightly decreased from yesterday’s value of 1.38 to 1.35, indicating slowing momentum, it does not necessarily indicate a trend reversal yet.
Resistance and Support Levels
In terms of resistance levels, AAVE faces initial resistance at the reverse Fibonacci 0.382 level of $64.54. More significant overhead pressure can be found between $67.99 and $70.12, close to the key Fibonacci 0.5 level of $69.03.
On the support side, AAVE has a horizontal support zone ranging from $61.46 to $62.97, which includes the 100-day Moving Average (MA) at $62.24. If buying interest returns, this area could provide a bounce for the price.
Conclusion
As AAVE takes a breather from its recent rally, the broader technical analysis suggests potential buying opportunities in the future. However, it is important to note that cryptocurrency markets can be volatile, so traders should closely monitor the key levels mentioned above.
When considering which token to invest in, it is crucial to consider multiple factors. While AAVE may become an attractive prospect soon, experienced traders understand the importance of patience when navigating through market volatility.
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