The recent cryptocurrency market rally has stalled, with prices of most coins and tokens currently down by less than 1%. AAVE, the native coin of the Aave blockchain, is hovering around $173 on Wednesday, up by less than 1% in the last 24 hours.
Its positive performance comes amid improved on-chain and derivative metrics, suggesting that investors and traders are bullish about AAVE’s price action. With Bitcoin trading below $93k, AAVE could retest a key psychological level around $200 in the near term.
On-chain and derivatives data support AAVE’s bullish outlook
AAVE, the native coin of the Aave DeFi ecosystem, is up by less than 1% in the last 24 hours and is now trading above $173.
The rally comes as the coin has impressed in the past few days and could record further gains in the near term.
AAVE’s rally is supported by on-chain and derivative metrics.
According to CryptoQuant, AAVE’s spot market data shows cooling conditions and buy-side dominance. Furthermore, the futures market is currently showing large whale orders.
These factors signal improving sentiment among traders, suggesting a potential breakout for the cryptocurrency in the coming days.
The derivatives data obtained from CoinGlass also shows that AAVE’s funding rate signals a strong bullish bias.
The OI-Weighted Funding Rate data indicate that the number of short traders is lower than those anticipating a price increase.
The metric switched to positive earlier today, reading 0.0070%, indicating that longs are paying shorts.
This usually suggests that AAVE’s price could rally higher in the near term.
AAVE eyes a breakout to $200
The AAVE/USD 4-hour chart remains bearish and inefficient despite Aave adding 14% to its value in the last seven days.
At press time, AAVE is trading at $173, which falls within a falling parallel channel pattern.
A breakout of this pattern favors the bulls, with AAVE expected to rally higher in the near term.
If AAVE breaks above the 50-day Exponential Moving Average (EMA) at $176.99, it could rally towards the $200 psychological level.
An extended bullish run would push AAVE towards a technical target of $267.68 (the distance between the channels from the breakout point).
The Relative Strength Index (RSI) on the 4-hour chart reads 64, closing in on the overbought region, indicating bullish momentum is gaining traction.
Furthermore, the Moving Average Convergence Divergence (MACD) indicator shows a bullish crossover and rising green histogram bars above the neutral level, adding further bullish confluence on the bullish bias.
However, if AAVE fails to close above the $176 resistance level, it could extend the decline toward the December 31 low of $146.63.
The bulls would need to defend the weekly support level at $158.27 to allow for further upward movement.
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