Assessing the risk Aave buyers will bear if they decide to buy the dip

Disclaimer: The knowledge introduced doesn’t represent monetary, funding, buying and selling, or different forms of recommendation and is solely the author’s opinion

• Indicators confirmed momentum was firmly bearish for Aave
• The decrease timeframe vary highlighted buying and selling alternatives on the extremes

The volatility of Bitcoin [BTC] has been considerably low over the previous week. The onset of the festive season may imply skinny order books and low liquidity and will take until after the New 12 months to resolve.

Learn Aave’s [AAVE] Value Prediction 2023-24

As issues stand, the $17.3k space posed stiff opposition to the bulls. Aave noticed sturdy promoting stress earlier in December and the retest of $63 as resistance meant additional draw back was seemingly.

The decrease timeframe vary highlighted an space the place consumers might step in

Supply: AAVE/USDT on TradingView

Aave has traded inside a variety that prolonged from $56.6 right down to $53.1. It was shaped on 19 December. On the backside of this vary lay a pocket of liquidity, beneath a degree of short-term help at $53.7. Scalp lengthy positions will be tried on a go to to the vary lows, focusing on $55 and $56 as take-profit ranges.

Nevertheless, the longer-term view of Aave remained bearish. It noticed an enormous drop from $97 to $55 within the wake of the panic surrounding FTX’s collapse in early November. A take a look at the On-Steadiness Quantity (OBV) revealed that the bulls have been lively in shopping for Aave tokens and defended the $50.6 help degree. The OBV recovered to ranges it had been at since July.

Nevertheless, this doesn’t rule out the potential for one other drop. The market construction remained bearish, and the psychological $50 degree may very well be examined as soon as once more. The Relative Power Index (RSI) has been under impartial 50 since 7 December to point bearish momentum was dominant. The shifting averages additionally signaled downward stress.

The $56-$58 space can provide superb a perfect brief entry. Any transfer previous $58 would present the bias has flipped bullish once more.

Open Curiosity declines however CVD famous some features just lately

Supply: Coinalyze

The Open Curiosity and the spot CVD has picked up since 19 December. However the worth has traded inside a variety throughout this time. This advised that cash was getting into the market. Specifically, the rise in spot CVD meant consumers have been taken with AAVE at these costs.

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Nevertheless, since late November each of those metrics have been in a robust downtrend. Due to this fact, the customer power in latest days might get overwhelmed rapidly if Bitcoin faces bother on the $16.6k mark.