AAVE token faces a potential price correction according to an analysis by analyst Ali Charts. The asset’s price of $135.55 may soon see a downturn, based on historical patterns and technical indicators.
Ali raised concerns about this AAVE’s possibility in a tweet. He pointed to a recurring pattern on AAVE’s daily chart, where a specific technical indicator has previously signaled price drops.
TD Sequential Signals Potential Downturn
Ali’s analysis focuses on the TD Sequential indicator, a tool for detecting potential trend reversals in financial markets. According to Ali, this indicator has displayed a sell signal on AAVE’s daily chart.
The last four times the TD Sequential flashed a sell signal on the #AAVE daily chart, it was followed by an average correction of 27%. The same sell signal is now appearing, suggesting a potential drop for $AAVE. pic.twitter.com/12yZwLT5tp
— Ali (@ali_charts) August 21, 2024
Moreover, Ali tweeted that the last four instances when the TD Sequential indicator flashed a sell signal on the AAVE daily chart, it preceded an average correction of 27%. He added that the same sell signal is now appearing, suggesting a potential drop for AAVE.
Historical Context and Price Movements
AAVE’s recent price movements add context to this prediction. Per CoinGecko data at press time, the token trades at $135.55, with its daily trading volume of $398,589,872. Despite a slight 0.94% dip in the last day, AAVE has seen a 28.14% rise over the past week.
This recent surge makes the potential for a correction more plausible. Rapid price increases often lead to profit-taking by traders, which can trigger downward price movements.
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Contrasting Perspectives on AAVE’s Future
However, not all traders share the bearish outlook. Daan Crypto Trades (@DaanCrypto) offers a more optimistic view of AAVE’s price action. In a recent tweet, Daan stated, “$AAVE Still looking great. Eyes on the local/cycle highs at $154.”
Daan acknowledges the possibility of consolidation but remains bullish overall. He suggests that if consolidation occurs, he would want to see AAVE hold the range highs around $115.
$AAVE Still looking great. Eyes on the local/cycle highs at $154.After that, things can get really fun but keep in mind that nothing goes up in 1 straight line.Consolidation at some point makes sense, and if that happens I want to see this hold the range highs at ~115. https://t.co/2TwhXuqDNn pic.twitter.com/aYTMAdYDx8
— Daan Crypto Trades (@DaanCrypto) August 21, 2024
The analyses from Ali and Daan Crypto Trades highlight the complexity of crypto price movements. While historical patterns suggest a potential correction, recent price strength indicates ongoing buyer interest in AAVE. Besides, the 27% correction scenario and the push towards new highs, are both possibilities.
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