A rather depressing period began in the AAVE market on 13 February. The AAVE price’s parabolic growth, which began in December 2020, locally ended at $581. Thus, the price did not reach the forecasted reversal zone, which we wrote about in the previous article.
In 12 days, sellers managed to lower the AAVE price by 45%. The main defeat of buyers was the loss of the mark of $475:
Range of $470-510 is AAVE’s Sales Zone
As we can see in the chart, trading volumes during the price growth were abnormally high. On 10 February after trying to break the range of $470-510, the AAVE price did not continue to grow aggressively.
This fact shows that in this range the big AAVE players have organized a liquidity sales zone. Currently, the range of $470-510 is under the sellers’ control. The probability of a continued correction in the AAVE market is quite high.
If we analyze the AAVE market on a smaller timeframe, we see that buyers managed to correct the previous fall wave by 50%:
Last Chance for AAVE to Continue Growing Is In the Range of $260-285
If buyers manage to keep the mark of $330 during the local fall wave, the probability of continued growth to $416 is quite high.
Though, after such a maneuver, buyers may start a new fall wave with a target of $260-285. This mark is a critical point and will deter the price from continuing to fall. If buyers are unable to keep this mark, the AAVE price will quickly test the mark of $200.
We will consider an alternative scenario of the AAVE market’s continued growth only after fixing the price above the range of $470-510. In that case, the $650-750 test will be a matter of time.
At the moment, the correction in the AAVE market looks controlled. If we look at the weekly timeframe, we see that trading volumes during the fall are less than volumes during the growth:
As we can see in the chart, the main buyers’ support is in the range of $265-300. Therefore, for a new growth wave, it is important for buyers to keep control over this range. Despite the controlled situation in the AAVE market, we believe that next week sellers will attack this range.
That’s why investors should be patient and calm because the AAVE price can hang for a while in a wide range of $260-480.