Over the past week, Aave (AAVE) has shown a strong upward trend despite market pressures, capturing investors‘ attention. Although the altcoin market faced renewed supply pressure with Bitcoin’s (BTC) price pulling back from $70,000, AAVE demonstrated strength against this situation. Furthermore, only an 8% rise from the current price level could lead to a significant breakout for AAVE.
AAVE’s Rise and Positive Developments
In July, during the recovery of the cryptocurrency market, AAVE’s price rose from $71 to $107.13, marking a 50% growth. This indicates that for the second time in three months, there has been a significant recovery from $71, showing continued investor interest in AAVE during dips. This double bottom formation resulted in a ‘W’ shaped structure due to the price recovering from the same support level.
Relative Strength Index (RSI) supports this positive scenario by indicating increased demand pressure with lower dip levels. Additionally, the 50-day Exponential Moving Average (EMA) is about to cross above the 200-day EMA, which is considered a buy signal. The altcoin trading above its daily EMAs (20, 50, 100, and 200) further strengthens this signal.
As of today, AAVE’s price is trading at $106.5, with a daily increase of 1.2%. At the same time, its market value has risen to $1.58 billion. Under the influence of the double bottom formation, AAVE’s price could rise by another 8% to test the $114.7 resistance. The potential target of this formation is determined by adding the distance between the support level and the neckline to the breakout point, predicting the potential distance of the upcoming rally.
Potential Scenarios for AAVE
If buyers turn this resistance into a potential support level, the post-breakout rally could extend to $157 with a 38% increase. This potential rally will face intermediate resistances at $134 and $153.7.
On the other hand, surpassing the $114.7 resistance seems unlikely. If Bitcoin‘s price continues to struggle around the $70,000 supply zone, many major altcoins, including AAVE, may lose their recovery momentum. A possible pullback from $114.7 could invalidate the positive scenario for the altcoin, causing its price to fall back to $71.
