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AAVE could fall if it closes below this key support level, says analyst
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After recording a drop of more than 7%, the Aave cryptocurrency (AAVE) is showing clear signs of weakness, according to analysis by Manish Chhetri. The cryptocurrency continues to decline this Wednesday, trading below an important support level. This could indicate a steeper drop in the coming days.
According to Chhetri, “AAVE price broke the ascending trend line, which had been forming by connecting several low levels since mid-August.”
The token is currently priced at around $141.19, below the daily support of $142.69. This break in support, combined with the drop below the 50-day exponential moving average (EMA), which sits at $139.47, suggests that the AAVE price could retreat further.
The analyst points out that, “if AAVE closes the day below the support of US$142.69 and the 50-day EMA, the cryptocurrency could lose another 17% in value, retesting the level of US$116.09, corresponding to 61.8% Fibonacci retracement.”
AAVE Price Analysis
This technical level is derived from analysis between the August low of $76.15 and the late September high of $180.70.
Other technical indicators also reinforce the bearish scenario for AAVE. The MACD (Moving Average Convergence Divergence), for example, presented a bearish crossover last Monday. This signals a sell.
The analyst also pointed out that the MACD line crossed below the signal line, and the red bar chart below the neutral line reinforces the downward outlook for AAVE.
Furthermore, the Relative Strength Index (RSI), which measures the strength of price movement, fell to 43, below the neutral level of 50. According to the analyst, when the RSI drops below 50, it indicates that the selling momentum is gaining momentum.
On-chain data is also in line with the bearish outlook for AAVE. The Network Realized Profit/Loss (NPL) indicator, which calculates network-level return on investment based on on-chain transaction volume, shows an increase in the number of investors who have realized profits recently.
Chhetri also highlights that AAVE’s NPL rose from 2.33 million to 7 million between September 22nd and 23rd, and from 3.58 million to 5.17 million between September 26th and 27th. These spikes suggest that investors are selling their positions and increasing selling pressure.
AAVE could fall if it closes below this key support level, says analyst
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AAVE could fall if it closes below this key support level, says analyst
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AAVE could fall if it closes below this key support level, says analyst