AAVE Technical Analysis Feb 5

The dominant downtrend in AAVE continues; the recent LH/LL structure may deepen with the break of $110.31 support, but short-term recovery signals are observed with oversold RSI.

Market Structure Overview

AAVE’s current market structure indicates a clear downtrend. In the recent period, lower highs (LH) and lower lows (LL) formation dominates instead of higher highs (HH) and higher lows (HL). Price is trading below EMA20 ($142.09) and consolidating at the $111.82 level with a 24-hour -8.07% drop. In multi-timeframe (MTF) analysis, a total of 10 strong levels were identified on 1D, 3D, and 1W charts: 1 support/2 resistance on 1D, 1 support/2 resistance on 3D, 2 support/3 resistance on 1W. This structure strengthens the overall bearish bias. Although RSI at 25.74 is in oversold territory, MACD shows a negative histogram and Supertrend gives a bearish signal at $149.91 resistance. The market is testing the $110.31 swing low; holding here may provide short-term relief, but a break confirms LH/LL.

Trend Analysis: Uptrend or Downtrend?

Uptrend Signals

For an uptrend, the HH/HL structure must reform. A decisive close above the recent swing high of $115.8833 (74/100 score) could trigger a BOS (Break of Structure) toward $124.7606 (66/100). This would lead to a structural target of $173.9502 (49 score). However, there is no HL in the current structure; bullish signals remain weak as long as price stays below EMA20. Although RSI has oversold bounce potential, low-volume recoveries are usually limited by LH.

Downtrend Risk

The downtrend is strong with LH/LL: Rejection from the recent lower high of $115.88 formed a new lower low at $110.31. If $110.31 breaks, it confirms CHoCH (Change of Character) and leads to a bearish target of $46.93 (21 score). On the 1W timeframe, 3 resistance pressures require BTC confirmation for an altcoin rally. Supertrend is bearish and MACD is negative; +8% daily drop momentum continues.

Structure Break (BOS) Levels

For bullish BOS, a daily close above the $115.8833 swing high is mandatory; this invalidates the short-term HL and opens the path to $124.76. Stronger confirmation is a break of $149.91 Supertrend. Bearish BOS is a close below $110.3100 (79/100) swing low: This breaks the structure, wipes out 1D/3D supports, and accelerates to $46.93. MTF shows resistance dominance (7R/4S), favoring downside. BOS levels determine trend continuation/reversal; volume increase should be monitored as price tests these levels.

Swing Points and Their Importance

Recent Swing Highs

The nearest swing high $115.8833 (74/100) acts as short-term resistance. A break gives an HH signal, while failure confirms LH. The upper level $124.7606 (66/100) is weekly resistance; if not surpassed, the downtrend continues. These points are liquidity collection zones; rejections create sell-side imbalance.

Recent Swing Lows

Strong swing low $110.3100 (79/100) is critical support. Holding it provides a base for HL formation, but a break extends LL. There are additional supports on 1W, but BTC correlation is weakening them. Swing lows are ideal for long entries, with stop-loss below $110.

Bitcoin Correlation

AAVE is a highly correlated altcoin with BTC; BTC at $66,183 (-8.81%) is in a downtrend with bearish Supertrend. If BTC supports at $66,720/$62,778 break, it triggers a $110 cascade in AAVE. If BTC resistances at $69,399/$72,032 are surpassed, it supports AAVE $115+ BOS. Rising BTC dominance crushes altcoins; BTC stability is expected. Monitor BTC structure for AAVE Spot Analysis and AAVE Futures Analysis.

Structural Outlook and Expectations

Overall outlook is bearish: LH/LL structure intact, $110.31 BOS level is key. Holding leads to consolidation with $115.88 retention, break leads to deep drop. Bullish invalidation is $115.88+ close and BTC rally. Oversold RSI may provide recovery, but above EMA20 is required. Use swing levels in trades, prioritize risk management. Market is volatile; no news flow, technicals dominate.