The cryptocurrency market is again under strong bearish pressure, leading to a wipeout of earlier recovery gains. Ethereum and most major altcoins have been affected, but Aave is showing resilience.
Current Market Situation
In the past week, Ethereum has dropped over 6%, falling below the $1,875 level. Despite the selling pressure, Aave (AAVE) remains resilient amidst the trend, staying in the green. However, AAVE has been in a 90-day correction of 47%, testing a crucial support level.
Cup and Handle Pattern
On the weekly chart, AAVE is forming a cup and handle pattern—a well-known bullish formation often preceding a strong breakout. This pattern emerged after a rejection at $399 on December 9. Currently, the price is testing its 50-day moving average (50 MA) at $175. The MACD is showing early signs of a potential trend reversal. A bullish crossover may confirm a strong buy signal, supporting a price rebound.
Conclusion: Prospects for AAVE
A bounce from the 50 MA could initiate a recovery rally. The next few weeks will be crucial, as a breakout from the handle formation may set the stage for significant price growth. It's important to monitor AAVE’s price movement and BTC dominance, as Bitcoin’s trend could influence the overall market movement.
In the coming weeks, AAVE may demonstrate significant recovery if a bounce occurs from the current support. However, investors should remain vigilant to market movements.
