Bitcoin Price Pressure May Lead AAVE to Test $240 Support Amid Market Uncertainty

• AAVE experienced a brief breakout above $280 but quickly corrected amid Bitcoin’s price rejection and increased market selling pressure.

• The altcoin’s price action suggests a potential retracement to key support levels around $260 and possibly $240 in the near term.

• According to COINOTAG, “AAVE’s weekly chart indicates a critical range-bound phase, with the 50% retracement level at $262 acting as a pivotal resistance point.”

AAVE’s recent breakout faltered as Bitcoin’s correction triggered selling pressure, pushing prices toward $260 and highlighting critical support zones.

AAVE’s Price Action Signals Long-Term Bullishness Despite Short-Term Volatility

The weekly chart of AAVE reveals a significant rally in late 2024 followed by a sharp decline in early 2025, erasing all prior gains and returning the price to the $125 support level. This volatility underscores the altcoin’s susceptibility to broader market trends, particularly Bitcoin’s performance. However, the formation of a potential trading range between $125 and $380-$400 suggests consolidation, which could set the stage for future upward momentum. The 50% retracement level at $262 has emerged as a crucial resistance point, with the recent breakout above $280 signaling renewed bullish interest. A weekly close above this threshold would bolster confidence among investors, supported by an increasing On-Balance Volume (OBV) since April, indicating accumulation by market participants.

Source: AAVE/USDT on TradingView

Short-Term Retracement and Support Levels Highlighted by Daily Chart Analysis

The 1-day chart provides a clearer picture of AAVE’s recent price dynamics, illustrating a range-bound movement between $240 and $280. After a breakout early in the week, the price retraced to retest the $260 midpoint support, indicating a potential consolidation phase. Notably, the trading volume surged during the price decline, signaling strong selling pressure and bearish dominance, which the OBV trend corroborates. Despite this, the presence of the 20-day and 50-day moving averages (DMAs) suggests underlying bullish momentum. These moving averages are expected to act as dynamic support levels, particularly the 50 DMA near $240, which could serve as a strategic entry point for investors looking to accumulate AAVE at a discount. The confluence of technical indicators at this level may prevent further downside and stabilize the price.

Source: AAVE/USDT on TradingView

Market Sentiment and Future Outlook for AAVE Investors

Market sentiment around AAVE remains cautiously optimistic despite recent volatility. The altcoin’s ability to hold above critical support levels will be key to sustaining bullish momentum. Investors should monitor Bitcoin’s price movements closely, as BTC’s rejection at $110k has a direct influence on altcoin performance, including AAVE. The current technical setup suggests that a retest of the $240 support zone could offer a favorable risk-to-reward ratio for buyers. Additionally, the increasing OBV and supportive moving averages provide a foundation for potential recovery. However, traders are advised to remain vigilant for signs of sustained selling pressure that could invalidate the bullish thesis.

Conclusion

In summary, AAVE’s recent price action reflects a complex interplay between short-term corrections and long-term bullish potential. While the failed breakout above $280 triggered a retracement, the formation of a defined trading range and supportive technical indicators like the 50 DMA and OBV suggest that key support levels around $240-$260 could hold firm. Investors should consider these zones as strategic entry points while maintaining awareness of broader market trends, particularly Bitcoin’s influence. Careful monitoring and disciplined risk management will be essential for navigating AAVE’s evolving market landscape.