The cost of Aave (AAVE) has greater than bending inside a month, nevertheless its bullish momentum might be reaching an item of exhaustion.
AAVE cost tests key inflection level
Particularly, AAVE has surged by over 103% after bottoming out in your area at $45.60 on June 18, hitting almost $95.50 this This summer 15. Nonetheless, the token’s sharp upside retracement move has introduced its cost closer to the stage that triggered equally sharp pullbacks since early June.
Quite simply, AAVE continues to be testing an climbing trendline resistance that is really a “bear flag,” a bearish continuation pattern. For example, the trendline’s previous test on This summer 9 wound up inside a 20% downside move. Similarly, an identical attempt on June 24 pressed AAVE cost lower by nearly 30%.
Because of this distribution behavior, AAVE’s ongoing make an effort to break over the flag trendline could talk with extreme selling pressure. A pullback could then see AAVE/USD retest the flag’s lower trendline near $67.75 since it’s downside target by September, lower almost 30% from This summer 15’s cost.
Meanwhile, the $76.30-level can serve as interim support, mainly because of its history like a cost floor in May that preceded a 60% rebound move.
Bear flag breakdown scenario
Usually of technical analysis, the breakdown below $67.75 often see AAVE plunging up to the peak from the “flagpole” that created prior to the bear flag. That will possess the token eye $35.50 since it’s bear flag profit target, lower over 60% in the current cost.
On the other hand, a ongoing rebound move over the bear flag’s upper trendline would invalidate the breakdown setup. Within this situation, the bullish target for AAVE will probably be the $115–$120 range that offered as resistance in June.
GHO stablecoin
Over fifty percent from the gains during AAVE’s cost rally came after its proposal to produce a U.S. dollar-pegged stablecoin known as GHO.
1/ Calling all GHOsts
We’ve produced an ARC for any new decentralized, collateral-backed stablecoin, indigenous to the Aave ecosystem, referred to as GHO.
Find out more below and discuss your ideas for that snapshot (not far off)!https://t.co/P7tHl9LbBe
— Aave (@AaveAave) This summer 7, 2022
Related: UNI, MATIC and AAVE surge after Bitcoin cost bounces back above $20K
On This summer 7, Aave Companies, a centralized entity that backs Aave’s lending protocol, requested its community to election on their own “overcollateralized” stablecoin proposal. AAVE’s cost surged by over 53% afterward, brought by speculations that GHO would boost the DeFi token’s adoption.
However, any more gains would risk pushing AAVE into “overbought” territory using its daily relative strength index (RSI) treading just five points below 70 by This summer 15
Rising over the 70 threshold could push AAVE’s cost right into a correction phase, likely triggering the bear flag scenario as discussed above.
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