The price movement of Aave (AAVE) is revealing clear signs of recovery. This altcoin has cleverly turned the recent correction into a springboard for a new surge.
After falling into the gap left by the previous price surge, this token quickly encountered strong resistance and bounced back, recording a more than 5% increase within just 24 hours.
Support confluence
This recovery is not a coincidence. The price of AAVE has been firmly supported right at the confluence zone between the upward trend line and the price gap filled around the $270 mark — an area that has activated strong rebounds three times since April.
For both traders and long-term investors, this is a noteworthy area. It reflects that the market is still respecting AAVE's short-term technical structure, despite the disruptive fluctuations last week.
AAVE leans towards a bullish scenario
Momentum indicators are continuing to reinforce the optimistic technical picture. Specifically, AAVE's Stochastic RSI is gradually approaching the oversold zone, suggesting a reversal signal that could open up a new upward movement.
Notably, the analysis from Bitcoin Magazine based on exchange flow data from CryptoQuant also agrees with this positive scenario. The amount of AAVE withdrawn from exchanges is narrowing, indicating that fewer tokens are leaving the platform.
This development somewhat reflects a cautious sentiment: large investors seem reluctant to increase their accumulation and are waiting for the right moment to act.
Liquidity cooling off, cautious signal
However, data from the Spot market has sent out notable warning signals. Trading volume is currently lower than in early month, indicating a pronounced slowdown.
Observing from the bubble map, trading activity shows signs of cooling off, suggesting that the AAVE market may be entering a 'resting' state. However, historically, this lull is not necessarily a negative signal. On the contrary, the decrease in trading volume may reflect the patience of investors as they await clearer confirmation signals about the upcoming trend.
Overall, with technical indicators still supporting the bulls along with supportive on-chain data, there is a high probability that AAVE's current upward momentum will be maintained in the short term, at least until there is a more pronounced change in market structure.
