The negative sentiment associated with China’s crackdown on crypto has affected the market outlook of most altcoins
Aave’s price is hovering near $276 at the time of writing, with intraday action seeing bulls seek fresh momentum with a 3% uptick in early Wednesday deals. The minor change in price movement comes as the broader market looks to stem widespread downward pressure that saw Bitcoin test support around $42,000.
The altcoin market is showing resilience though and aggressiveness from the bulls could see Aave bounce alongside major alts like Ethereum, Cardano and Solana. The three coins are showing signs of a short-term positive flip after retesting key support areas around $2,900, $2.10 and $138, respectively
AAVE price outlook
The AAVE/USD pair has bounced off lows of $256 as buyers target new momentum following the decline from highs of $415 reached on 16 September. The technical outlook is, however, slightly in favour of bears as seen on the daily chart.
The breakdown from an ascending triangle pattern looks to have invalidated the bullish view in place before this week’s market downturn. There’s a hint of a bear flag formation, a pattern likely to signal bearish continuation.
We also have the 50 SMA and 100 SMA curves indicating the potential for the correction to push prices lower. The perspective below will strengthen further if the RSI makes a new low below the equilibrium point.
AAVE/USD daily chart. Source: TradingView
If this scenario plays out, fresh losses towards $250 will open up AAVE/USD to further rot to $212 and then the psychological support at $200. The next main demand zone beneath this zone is around $150.
On the upside, AAVE will likely seek a daily close above $295, an area likely to present some slight resistance. If this zone is established as support over the next two candles, bulls can target further gains above the 100 SMA ($322), with new objectives putting the 50 SMA ($360) level into focus.