After a weekend recovery, the AAVE technical staff suggests that the bulls are in control. The short-term outlook for the token includes a planned breakout for $100 if pressure sends the AAVE/USD pair above $80.
However, if the wider altcoin market fails to sustain the bullish trend, the bears are likely still in play. The scenario will probably see the AAVE/USD pair consolidate just above $70 or drop to previous lows near $56, with the worst case scenario taking it to $38 in the short term.
As long as the bulls stay above $70, the technical outlook for the Aave’s price suggests a recovery to the high seen for the last time in August.
The Aave price has crossed the upper limit of a parallel channel downhill. The daily chart shows that the bulls are currently looking to consolidate above the upper limit of the channel ($71).
If bulls can hold prices above $71, the chart shows Bitcoin Revolution that the Fibonacci level of 0.786 provides the immediate resistance at $76 (yellow line) with the red line ($90) providing the next major hurdle. Above this level, AAVE bulls would target $100.
Daily AAVE/USD Chart. Source: TradingView
As shown in the daily chart, the Relative Strength Index (RSI) indicator is tending northwards to support the short-term bullish outlook.
If bulls fail to hold prices above the $70 level, the AAVE/USD currency pair could return to the S/R levels marked by the 0.618 and 0.5 Fibonacci levels ($65 and $57), respectively. SMA-100 ($55), SMA-50 (51) and SMA-200 ($38) provide additional support areas.
Graph AAVE/USD of 4 hours. Source: TradingView
On the 4-hour chart, MACD suggests that the bulls remain in control, with the formation of a bullish divergence indicating a strengthening of the positive outlook. The Relative Strength Index is also tending towards the overbought region.
However, a slight drop in the indicator coincided with a downward pressure influx that saw the price of Aave drop from highs above $76 to lows of $71 on the day. This suggests that despite holding the advantage, the bulls are still not entirely out of danger.
Therefore, if buyers fail to hold prices above $71 in the next few sessions, the AAVE/USD currency pair will likely fall to the support level near $68 (100-SMA). Another buffer zone on the downside, as highlighted on the 4-hour chart, is at 50-SMA ($65).