AAVE: Rise or Fall? January 12, 2026 Scenario Analysis

AAVE is currently positioned at a critical juncture around $165. Although the short-term downtrend dominates, the RSI's neutral level (46.07) and proximity to support ($164.72) keep both the upside bounce and downside breakout possibilities equally alive. This analysis aims to help traders understand market dynamics and make their own decisions by examining both scenarios in depth.

Current Market Situation

AAVE's current price is at $165.02, down %-1.10 in the last 24 hours, trading in the $163.27 - $171.69 range. Volume is at a moderate $181.91M, while the overall trend is downward. Technical indicators are giving mixed signals: RSI at 46.07 is in the neutral zone (not oversold, but momentum is weak), MACD reflects bearish pressure with a negative histogram. Price is trading below EMA20 ($166.42), signaling short-term bearish bias. The Supertrend indicator is in bear mode and pointing to $174.30 resistance.

Critical levels are as follows: Support $164.72 (strength score 69/100), resistances $165.27 (79/100 - strongest), $168.81 (74/100), and $182.89 (70/100). Multi-timeframe (MTF) analysis detects 12 strong levels on 1D/3D/1W: balanced 2 supports/2 resistances on 1D, resistance-heavy on 3D with 2 resistances, and on 1W with 2 supports/5 resistances, indicating dominant resistance on higher timeframes. This structure offers both opportunities and risks to market participants. Bull target $178.10 (score 16 - low probability), bear target $150.74 (score 44 - more pronounced), requiring traders to calculate the current R/R ratio based on their own risk profiles.

There is no recent news flow in the market context, so technical factors are in the foreground. Traders can access additional data from the AAVE Spot Analysis and AAVE Futures Analysis pages.

Scenario 1: Upside Scenario

How Does This Scenario Unfold?

For the upside scenario, the first requirement is a strong daily close breaking above the $165.27 resistance (79/100 strength). This level overlaps with the short-term EMA20 ($166.42) as the first test point. Post-breakout volume increase and RSI rising above 50 confirm momentum. MACD histogram approaching or crossing the zero line indicates weakening bear momentum. Supertrend flipping to bull mode (above $174.30) serves as secondary confirmation.

MTF shows 1D balance and 1W supports (invalidation below $164.72) playing a supportive role. A %20+ volume increase signals institutional buying. In this scenario, price is expected to quickly test $168.81 (74/100); failure here invalidates the scenario. Traders should monitor classic patterns like bull flags or EMA crossovers - these educationally confirm trend changes.

Target Levels

First target $168.81 (74/100), followed by $174.30 Supertrend resistance and main bull target $178.10 (score 16). In a more optimistic extension, 3D/1W resistances ($182.89) can be tested. Fibonacci extensions (%161.8) and volume profiles should be used at each target. Invalidation: Loss of $164.72 support invalidates the scenario; traders define risk by setting stops accordingly.

Scenario 2: Downside Scenario

Risk Factors

The downside scenario is triggered by rejection at $165.27 resistance. Price breaking the $164.72 support (69/100) on an hourly/daily close initiates cascading sales. If MACD's negative divergence deepens and RSI falls below 40, momentum shifts bearish. Persistent trading below EMA20 ($166.42) and strengthening Supertrend sell signal intensify.

Resistance weight on higher timeframes (3D/1W: 7 resistances) increases overall pressure. Selling volume spikes (%30+ downside increase) or BTC correlation (if BTC weakens) heighten risk. Traders learn how this scenario develops by recognizing bear triangles or head-and-shoulders formations. A fake breakout to $168.81 followed by reversal becomes a classic trap.

Target Levels

First target below $164.72, main target $150.74 (score 44). Secondary levels include MTF supports and %-10 Fibonacci retracement. Deeper downside targets 1W lows. Invalidation: Close above $165.27 invalidates the scenario. Traders educationally grasp minimizing potential losses by using these levels in R/R calculations.

Which Scenario to Watch?

Key triggers: For bull, close above $165.27 + volume increase + RSI>50; for bear, close below $164.72 + MACD deepening + volume downside. Confirmation signals: Daily candle closes (doji/red candle difference), EMA crossovers, and Supertrend flip. MTF alignment is critical - 1D breakouts must be confirmed by 3D/1W. Monitor volume profiles and order blocks (support/resistance volume accumulations). Traders test their biases by noting each scenario's invalidation.

Conclusion and Monitoring Notes

AAVE's balance around $165 offers traders preparation opportunities in both directions. Monitoring points: 1. $165.27/$164.72 closes (priority), 2. Volume/MACD/RSI alignment, 3. BTC/DeFi sector correlation. Prioritize daily/4H charts, use weekly MTF for context. Follow spot and futures markets via AAVE Spot Analysis and AAVE Futures Analysis. This analysis is designed to develop your market reading skills - do your own research.