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Aave (AAVE) is experiencing turbulent times, with a significant 24.5% price drop over the past week amid muted trading activity.
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Despite a bullish structure in the weekly overview, the potential for further declines looms as market sentiment continues to wane.
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As noted by industry analysts, a breach below the crucial $200 psychological barrier could trigger prices to plummet to the $141 mark.
Explore how Aave’s recent price fluctuations and market dynamics may signal a critical transition for investors as liquidity levels shift significantly.
Is Aave on the Verge of Losing the $200 Support Level?
Source: AAVE/USDT on TradingView
Over the past two months, Aave has faced a drastic downturn, reverting much of its bullish momentum from the previous quarter. Following its descent through support levels at $284 and $235, the asset now threatens to breach the pivotal $196 mark.
Should AAVE drop below this threshold, targets at $177 and $141 become critical for buyers looking to re-enter the market. Although technically the weekly swing suggests a bullish structure, current indications point towards potential retracements of up to $125.
The Accumulation/Distribution (A/D) indicator reflects ongoing selling pressure, although it hasn’t yet completely overshadowed recent buying momentum. Additionally, the Awesome Oscillator suggests a notable shift in market dynamics commenced around mid-January.
Source: AAVE/USDT on TradingView
Consideration of daily chart trends reveals a distinctly bearish trajectory, characterized by low trading volumes recently. The prevailing indications from the A/D indicator suggest insufficient momentum to alter the existing negative trend.
The Awesome Oscillator similarly implies a distinct bearish sentiment, with notable support points at $196, $171, and $155 where potential reversals could occur. A strategic approach for buyers may include waiting for a range formation as a sign of consolidation before initiating further bids.
Source: Coinglass
In short-term assessments, the $192 and $216 levels are pivotal due to recently accumulated liquidation points. Both the 2-day and 3-day AAVE liquidation heatmaps indicate a liquidity cluster around these figures, with the next significant threshold positioned at $270.
With increasing volatility observed, traders should remain cautious of a potential bounce back to $216, representing a 12% rise that may draw in liquidity before a resumption of downward momentum.
Conclusion
In summary, Aave’s current situation underscores the importance of monitoring key support levels closely. The potential decline below $200 could signify further bearish pressure, elevating the significance of the $141 level as a potential buy point for long-term holders. Investors are encouraged to adopt a strategic approach, focusing on observed market trends and awaiting clear consolidation signals before committing to new positions.
