Thursday, December 9

AAVE is stuck alongside the DeFi sector and we may not see a recovery in the short term

It seems that October has hit hard the main cryptos of the DeFi sector, where AAVE initially stands out, which has had fluctuations not as pronounced as those of Bitcoin or Shiba Inu; It has not even left an “attractive” return to its investors in recent days; And this despite the fact that the market is bullish and various cryptocurrencies have already been pumped.

Before going into the details, let us remember that AAVE is currently trading $ 296.68 and registers a loss in the last 24 hours of 0.865%, although it accumulates a gain in the last 7 days of 6.33% according to CoinMarketCap.

The market continues to rise and AAVE remains stagnant due to low interest from investors

First of all, it is important to consider that there has been a slight loss of interest from investors in the DeFi sector; This negatively affects the AAVE token, as it belongs to this group and is one of the most prominent of it. In addition, as can be seen in the graphs, the volume of trade with AAVE has drastically decreased; also confirming the loss of interest on the part of investors.

On the other hand, despite the fact that the social volume graph has remained above normal standards, a detrimental aspect is the fact that the number of DeFi addresses has not continued to grow; locating below 100K. Needless to say, these are important data, that when they stop growing they note the low attraction of investors to the decentralized finance sector.

It should be noted that the amount of sales of the AAVE token on exchanges has also increased; which could end up causing increased sales pressure for the next few days; fact that could take the token to lower supports.

Short-term technical analysis

During these days of October, the AAVE token has been in a period of consolidation, respecting some supports and resistances; although from October 15 until the time of writing a triple top was formed near the resistance that is located at $ 326. This shows weakness on the part of the bulls, and that clearly the supply continues to increase.

If the number of tokens entering the exchanges continues to increase, it is certain that we will touch the closest support located at $ 273; since their output is quite low.

In addition, the candles crossed below the mid-line of the ENV channel, and a cross was also seen by the 20 and 50 EMAs; also confirming the short-term downtrend.

Analysis of AAVE in timeframe of 4 hours
AAVE analysis over a 4-hour period. Source: TradingView.

While the EMAs and the ENV channel confirm the downtrend, the RSI crosses into oversold territories and stands at 45 points; suggesting that the selling pressure continues to grow and that the chances of seeing the AAVE token near the support located at $ 273 are getting higher and higher. Therefore, we suggest caution during the next few days; especially if you have positions in this crypto.

The information in this content should be taken for informational purposes only, not intending under any point of view to urge the purchase / sale of financial assets.