Date: Tue, July 08, 2025 | 03:10 PM GMT

As Q3 kicks off, the cryptocurrency market continues its impressive rally carried over from Q2. Ethereum (ETH) remains at the forefront, currently trading near $2,550 — up a solid 78% over the past 90 days. Riding on this bullish wave, many altcoins are starting to flash compelling breakout patterns — and Aave (AAVE) is emerging as one of the top contenders for a strong upside continuation.

$AAVE is up over 120% in the past 90 days, driven by investor confidence in DeFi and a broader shift back to utility-focused projects. But now, a key fractal pattern may be signaling that this rally is far from over.

Source: Coinmarketcap

Diamond Continuation Pattern in Play?

On the 4-hour chart, AAVE has formed what appears to be a Diamond Continuation Pattern, a rare but powerful technical structure. This pattern typically acts as a pause in an existing uptrend before continuing higher.

The price recently broke out of the diamond structure, reaching a local high of $291, before pulling back slightly — a classic retest scenario seen after breakouts. This kind of price action mirrors a well-documented fractal in classic technical analysis (as shown in the small chart inset), where the breakout leads to a strong continuation move.

AAVE 4H Chart/Coinsprobe (Source: Tradingview)

Currently, AAVE is holding just above the breakout zone and is once again approaching the $291 mark. A decisive move above this level could reignite bullish momentum and send AAVE toward its next target.

What's Next for AAVE?

For confirmation of the bullish breakout, AAVE needs to close above its recent local high of $291 with strong volume. Doing so would likely validate the diamond continuation pattern and set the stage for a rally toward $390 — a gain of over 37% from current prices.

However, traders should be cautious of a daily close back inside the diamond structure, particularly below $275. A breakdown back into the pattern would invalidate the bullish outlook and could lead to a period of sideways consolidation or even mild correction.

Disclaimer: This article reflects the writer’s personal views and is for informational purposes only. It does not constitute financial advice. Always do your own research before making investment decisions in the cryptocurrency market.