The AAVE price has fallen short of reclaiming the uptrend, and now an ominous death-cross increases the bearish pressure. Decentralized Finance (DeFi) leader Aave (AAVE) has rolled over from critical resistance in the last two days, endangering the recent rally and leaving the Token vulnerable to another leg lower.
Confidence returned to cryptocurrencies in October after Fed Chair Jerome Powell alleviated fears of a US ban on digital assets. As a result, the crypto market has gained around $250 billion in market cap to $2.15 Trillion. Furthermore, Bitcoin (BTC) is building for a decisive break above $50k, which, if successful, could trigger outsized returns in altcoins. However, despite the general positivity, the Aave price is struggling.
Rapidly Detiorating Technicals
After bouncing 30% to $325 from last weeks $250 low, the AAVE price ran into significant overhead support. A rising trend line at $330, and the 100-day moving average at $328, rejected the rally, driving the price lower to $301 this morning. Additionally, the 50 DMA at $347 has crossed below the 200 DMA at $352. Technical analysts refer to this bearish development as a death cross which highlights growing negative momentum. The death cross adds to the already bearish technical backdrop and may encourage selling. If that proves true, the first line of support is last weeks $250 low. Below $250, the next significant support is $216, and following that, the June low at $165.
The bearish technical outlook stays in place until the AAVE price reclaims trend support above $330. In that event, the price should extend towards the 50, and 200-day indicators. Therefore, a close above $330 invalidates the immediate negative view.
AAVE Price Chart (Daily)
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