The Aave token faced significant resistance at the $335 mark, resulting in a sharp 12.03% price drop over two days. Analysts are forecasting potential further declines.
Technical Patterns Point To Extended Correction
Market analyst Ali Martinez outlined the emerging bearish configuration in an August 16 analysis. The double-top formation represents a classic reversal pattern where an asset attempts twice to surpass a resistance zone before retreating. This creates an 'M' shaped structure on price charts. Aave's chart displays this pattern clearly through two distinct rallies toward $335 during July and August. Both attempts failed to establish sustained breakouts above this level, and the token has since fallen below the $300-$310 support range.
Fundamentals Remain Strong
While technical indicators suggest near-term challenges, the underlying Aave protocol continues demonstrating robust fundamentals. The lending platform has processed more than $3 trillion in total deposits since its December 2020 launch. Current data from DefiLlama shows the protocol maintains $37.15 billion in total value locked across multiple blockchain networks, including Ethereum, Arbitrum, and Base, reflecting the protocol's multi-chain adoption strategy.
Outlook Hinges On Support Level Performance
The immediate trajectory for Aave depends largely on the token's ability to maintain support above the $278-$280 range. Holding this level could invalidate the bearish scenario and potentially set up a rebound attempt toward the $335 resistance zone. A successful reclaim of $335 would shift the technical outlook and could target the $370 region as the next resistance level.
Aave faces a critical technical juncture following its rejection at $335 resistance and subsequent formation of a bearish double-top pattern. While the underlying metrics remain strong with $3 trillion in historical deposits, the token's near-term price action will likely depend on whether support at $278-$280 can hold against selling pressure.
