- AAVE seemed to have a bullish bias on the 1-day timeframe
- Lack of heavy buying pressure on the approach of the $240 resistance zone left room for a retracement
Aave [AAVE], at the time of writing, was on an uptrend, having just surpassed the $230-local resistance level. The bullish sentiment across the crypto market meant that it seemed likely that AAVE would be pushed higher on the charts.
Source: AAVE/USDT on TradingView
The 1-day chart revealed that AAVE possessed a bullish structure. This market structure flip occurred after a move beyond the lower high from March. Situated at $185 and highlighted in white, the breakout past this level occurred earlier this month on high trading volume.
This hike in demand saw the OBV climb higher. At press time, the highs from March were being challenged on the OBV. This meant that the rally from the $160 zone was borne by high demand, and could go further.
The Fibonacci retracement levels plotted based on the rally in November noted that the retracement in 2025 wiped out all the gains made in the latter months of 2024. On the way up, certain levels, such as $230 and $262, would likely be stiff resistance.
At press time, the $230-zone appeared to have been flipped to support. AAVE bulls had been battling to surpass this level without success for nearly nine days.
A slight potential for range formation?
Source: Coinglass
The 3-month liquidation heatmap showed that AAVE was closing in on the liquidity pocket at $246.
The proximity of the market price to this liquidation region meant that a move north was likely in the coming days. Whether AAVE can advance beyond $250-$252 would depend on the strength of buying pressure.
Source: Coinglass
The 2-week liquidation heatmap highlighted the potential for a range formation. The magnetic zone at $245-$248 beckoned AAVE higher. However, this level marked the local high of the past four days.
It may be possible that AAVE would face rejection around the $250-level and retrace towards $210, but this scenario appeared unlikely. At the time of writing, the market sentiment was bullish and Bitcoin [BTC] was being pushed higher. This could spur the altcoin upwards too, and beyond the $250 resistance zone.
Hence, the $262 and $284 levels, along with $250, would be the key resistance levels to watch out for. Traders can keep an eye on the OBV to show sustained buying pressure. Otherwise, it would be an early warning sign.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion