AAVE Under Pressure – Will the Altcoin Fall 18% to $290?

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Amid the ongoing uncertain market environment, Aave (AAVE) has recently formed a bearish price trend and is expected to fall in the coming days. In addition to the downward pressure on price action, market sentiment and profit-taking in altcoins may also have a negative impact on AAVE's prospects.

Market Sentiment of AAVE

According to a report by on-chain analytics company Coinglass, AAVE has inflows of more than $5.2 million on exchanges, which generally means that there may be selling pressure, pushing prices downward. In addition, AAVE's long/short ratio has dropped to 0.79, the lowest level since late November, showing a generally bearish market. 58.9% of top traders hold short positions, while only 41.1% of traders are bullish. This shows that investors generally tend to bet on AAVE prices to fall.

Technical Analysis: Double Top Bearish Pattern

According to technical analysis, AAVE has formed a bearish double top price pattern and a bearish divergence has emerged on the daily timeframe. This suggests that AAVE could drop by about 18% in the next few days, hitting the $290 support level. As of now, AAVE is trading near $350, having fallen by more than 9% in the past 24 hours. Meanwhile, the trading volume has dropped by 28%, further indicating bearish market sentiment and less involvement from traders and investors.

Both the current technicals and market sentiment of AAVE show bearish signals. In the short term, if the upward trend cannot be resumed, AAVE may drop to around $290.

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