The price of Aave (AAVE) surpassed and closed above the resistance level of $200 on November 27, marking the continuation of the uptrend.
AAVE/USDT Daily Chart | Source: TradingView
Bears pulled the price back below $200 on November 29 but were unable to maintain lower levels. The AAVE/USDT pair bounced back from $200 on November 30, indicating that bulls are trying to turn this level into support. Bulls need to keep the price above $215 to pave the way for a rally to $260.
This positive outlook will be invalidated in the short term if the price drops and breaks below $194. At that point, the pair could fall to the 20-day EMA ($183).
AAVE/USDT 4-Hour Chart | Source: TradingView
Bears are trying to pull the price back to the 20-day EMA, which is an important support level to watch in the short term. If the price bounces strongly from the 20 EMA, it will indicate buying activity as the price drops. This will increase the prospects for the continuation of the uptrend.
Conversely, if the price breaks below the 20-day EMA, it will indicate that bulls are losing control. At that point, the pair could drop to the 50-day SMA. Bulls are expected to defend strongly at the 50-day SMA, as a break below this level could shift the advantage toward bears.