Over the last two weeks, Aave has become one of the top-performing crypto assets after bouncing off the $64.3 zone and starting its southward trajectory to the $82.5 zone where it now sits.
This bullish move to the upside came after a breakout from the falling wedge formation on Aave’s daily timeframe, as illustrated below.
Can Bulls Maintain This Bullish Momentum?
Aave reversed after hitting the resistance around $115 (horizontal purple line) in mid-August.
Soon after this bounce, the asset continued its bearish trajectory, falling below its 100, 50, and 20-period (yellow, orange, and red) moving averages on the 4-hour timeframe, as illustrated below.
After this drop from the $115 resistance, the price action of Aave caused the falling wedge that Aave has now broken out of.
Aave Poised for a Rebound
Now, however, the asset is trading above all three moving averages. The cryptocurrency’s price action is currently at the $83 support and is expected to consolidate for a while around this level.
In the event of a clear break above this resistance zone and a bounce to the upside, the next resistance level the bulls have to worry about is around the $92 to $94 region.
Interestingly, this price increase on Aave corresponds to the rate of development activity on the blockchain network. In late July, there was a slight divergence between the development activity on Aave and its price action.
However, the Open futures Interest in Aave, according to data from CoinGlass, is up by 6.16% over the last day, as illustrated below. According to data from CoinMarketCap, the cryptocurrency price is also up by 1.28% over the last 24 hours.
Amid all the excitement about Aave’s bullishness, it is important to realize that an unusually high Open Futures Interest rate indicates a potential market reversal.
Negative Network Activity On Aave
According to the blockchain forensics and analytics platform, PeckShieldAlert, Tron founder Justin Sun withdrew about $100 million USDT from V2 of the Aave protocol only a few days ago.
According to reports, the Tron founder performed these transactions in two separate instances, moving $50 million out of the protocol twice via the crypto exchange, Poloniex.
Naturally, such a huge withdrawal would be a red flag for whale manipulation, especially now that crypto prices show highly bullish signs.
It is important to be cautious of how one places their trades and conduct proper research before investing any money.
Disclaimer: The author’s comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)