Aave, a popular decentralized finance (DeFi) protocol, experienced a significant rally from $66.45 to $88 in the span of two weeks. This impressive surge represented a gain of 32.4%. However, the token encountered a notable retracement afterward, causing prices to drop below the $75 mark. Despite this setback, there is still optimism among Aave bulls who anticipate another upward move.
Market analysis reveals the presence of a bullish order block above the support level of $68.4. This zone is expected to attract buyers, but recent retests have not yet shown a strong presence of Aave bulls. Looking at the one-day chart, the $60 and $68 levels have proven to be crucial since mid-April. Over the past six weeks, the Aave bulls successfully turned both levels into support once again. The On-Balance Volume (OBV) indicator has also been on an upward trend for a month.
Although the Relative Strength Index (RSI) initially demonstrated strong bullish momentum earlier in the month, it has recently dipped toward the neutral 50 mark. This suggests a weakening of momentum, but it has not yet shifted into bearish territory according to the daily chart. Despite this, the price action indicates that the bulls remain in control. The overall market structure of Aave remains bullish, and the recent higher low at $68.7 would need to be broken for a bearish shift in structure. Notably, the bullish order block that led to the jump to $88 originated from this zone, indicating the potential for a significant positive reaction during its retest.
In terms of token holder activity, the 90-day mean coin age has plummeted since June 9. This decline implies that Aave holders have been selling rather than accumulating the token. However, this argument is contradicted by the price action over the past six weeks. Additionally, the MVRV (Market Value to Realized Value) ratio indicates a wave of profit-taking in the past week. This wave of selling is further supported by a substantial surge in dormant circulation. Nonetheless, if Aave can defend the $70 support zone in the coming days, it would increase the likelihood of another upward movement for the token.
In conclusion, Aave experienced a notable rally but encountered a retracement. Despite this dip, there is potential for a future price increase if the $70 support zone is successfully defended. However, market indicators suggest that some profit-taking has occurred recently. Investors and traders should closely monitor the price action and market trends to make informed decisions. As always, it is essential to conduct thorough research and analysis before engaging in any financial investments.
