aave

On the lower timeframes, $AAVE is currently trying to hold above a critical support zone. So far, the reaction is constructive and volume remains healthy, suggesting buyers are still active at this level.
As long as price holds above this support, the bullish structure stays intact and continuation remains the higher-probability scenario.
Invalidation to watch:
A 4H close below this support zone would signal a structural breakdown and invalidate the current bullish setup, opening the door for a deeper pullback.
For now, this is a decision area patience is key. Let the level confirm before committing.
#analysis #AAVE #altcoins $UNI

Aave (AAVE) is showing early signs of a potential breakout as price action, on-chain indicators, and derivatives data begin to align. On Wednesday, AAVE traded around $172, hovering near the upper boundary of a descending parallel channel that has contained price action since mid-August. A confirmed breakout above this structure could shift the technical advantage in favor of bulls.
Supporting this technical setup, both on-chain data and futures market metrics are pointing to improving market sentiment, increasing expectations of a notable move in the near term.
On-Chain and Derivatives Data Strengthen Bullish Sentiment
Aggregated data from CryptoQuant paints an increasingly constructive picture for AAVE. In the spot market, selling pressure appears to be easing, while buying activity is gradually gaining strength. At the same time, the futures market has recorded an increase in large-sized orders, suggesting that whale participation may be returning.
This combination typically reflects improving trader confidence and often precedes periods of higher volatility. From a derivatives perspective, bullish signals have become more pronounced as funding rates turn positive.
According to Coinglass, the OI-weighted funding rate for AAVE flipped into positive territory on Wednesday, reaching 0.0070%. This indicates that long positions are now paying shorts, a sign that bullish positioning is increasing while bearish bets are being reduced. Historically, similar shifts from negative to positive funding rates have coincided with strong upside moves in AAVE’s price.
AAVE Price Outlook: Breakout From Bearish Structure in Focus
Technically, AAVE remains within a descending parallel channel, formed by a series of lower highs and lower lows since August. A breakout above this pattern would represent a meaningful structural shift. As of Wednesday, price is pressing against the channel’s upper trendline, which also aligns closely with the 50-day EMA at $176.99, reinforcing this area as a key resistance zone.
In a bullish scenario, a daily close above $179.27—the nearby daily resistance—would confirm a breakout. This could open the door for further upside, with a technical target near $267.68, derived from the height of the channel projection.
Momentum indicators support this outlook. The RSI on the daily chart sits around 53, above the neutral 50 level, suggesting buying pressure is gradually taking control. Meanwhile, the MACD has printed a bullish crossover, with expanding green histogram bars above the zero line, reinforcing short-term bullish momentum.
Potential Trade Setup (Personal View, Not Financial Advice):
Buy Zone: $176.99 (on confirmed breakout and daily close)
Take Profit (TP): $267.68
Stop Loss (SL): $158.27 (weekly support zone)
Downside Risks to Monitor
If AAVE fails to break above the descending channel and faces renewed selling pressure, the price could retreat toward the December 31 low at $146.63, near the midline of the channel. A move below this level would weaken the bullish thesis and suggest a continuation of the broader corrective phase.
Conclusion
AAVE is approaching a technically significant area where price structure, momentum indicators, and derivatives data are converging. While risks remain, especially if the breakout attempt fails, improving on-chain and futures metrics suggest that market sentiment is shifting in a more constructive direction.
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Disclaimer: This article is for informational purposes only and reflects personal analysis. It does not constitute financial or investment advice. Always conduct your own research before making any trading or investment decisions.
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