Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
The market structure was bearish on the hourly chart after failing to break through the $81. The four-hour chart has a bullish outlook and may see Aave move higher.
Bitcoin [BTC] has swung from $28400 to $27300 in the last 24 hours to the time of writing. At the Fed’s policy meeting on March 21-22, the king of crypto could break out of this short-term range. In the meantime, altcoins like Aave [AAVE] offered trading opportunities on a lower time frame.
Read Aave’s [AAVE] Price Forecast 2023-24
With major economic news just around the corner, volatility is likely to be high in the crypto market for the next 48 hours. Therefore, risk management, which should always have the highest priority, will be essential.
The near-term mid-range level could offer resistance
Source: AAVE/USDT on TradingView
Last week, AAVE traded within a range (yellow) from $73.2 to $81.6. The mid-range value sat at $77.4. In the past two days, this level was broken as a support level and turned into resistance.
The past few hours of trading saw prices bounce to the mid-range. However, the RSI has not yet broken past the neutral 50. The DMI also showed a downward trend with both the ADX (yellow) and -DI (red) above 20.
Therefore, a shorting opportunity could arise on a retest of the mid-range level. It would be voided on an H1 session closing above $77.2, but some volatility may be present. A stop loss near $79 may be set as this would invalidate the bearish idea.
A move above $79 would indicate that the bulls are back in the driver’s seat and could push AAVE towards $82. More risk-averse market participants may want to wait for a rejection from $77.2 before entering short positions.
How much is 1,10,100 AAVE worth today?
The decrease in outstanding interest discouraged buyers
Source: Coinalyse
In addition to the price drop, Open Interest has also fallen in the past two days. This meant that long positions had to be closed, but short sellers had not yet entered the market en masse. Therefore, the sentiment behind AAVE was bearish, but not extreme.
The financing rate hovered close to zero, but was in positive territory, meaning buyers had a very slight upper hand. Still, the spot CVD has been in a consistent downward trend over the past week. This showed strong selling pressure.
This post AAVE sellers can force a drop to $73, here’s how
was published first on https://ambcrypto.com/aave-sellers-could-force-a-drop-to-73-heres-how/
