AAVE Technical Analysis Jan 21

AAVE is positioned in a critical squeeze zone at $156.87. Although the short-term downtrend dominates, the RSI being in the neutral zone and strong support/resistance levels across multiple timeframes make both an upside breakout and a downside collapse scenario possible. Traders should be prepared for both possibilities and monitor clear triggers.

Current Market Situation

AAVE is trading at $156.87, down %1.46 in the last 24 hours (range: $151.72 – $160.31). Volume remains at a moderate $138.59M level, while the overall trend continues downward. RSI at 42.19 is in the neutral-bearish zone, MACD shows a negative histogram, and price is trading below EMA20 ($166.15). The Supertrend indicator is giving a bearish signal, with resistance positioned at $183.64.

In multi-timeframe (MTF) analysis, 13 strong levels were identified across 1D/3D/1W timeframes: 2 supports/3 resistances on 1D, 1 support/2 resistances on 3D, and 3 supports/4 resistances on 1W. Critical supports are $156.07 (score 65/100) and $143.63 (score 63/100); resistances are $157.31 (score 74/100), $164.26 (score 64/100), and $217.80 (score 67/100). This structure indicates that price is consolidating in a narrow range and at a turning point where increased volatility is expected. There are no AAVE-specific major news in the market, but the general altcoin market is tied to BTC correlation.

Scenario 1: Upside Scenario

How Does This Scenario Occur?

For the upside scenario, a clear break and close above the $157.31 resistance is required first (score 74/100, high importance). If this breakout is supported by increased volume and RSI rising above 50, short-term momentum shift is confirmed. If the MACD histogram crosses above the zero line and price tests and breaks EMA20 ($166.15), Supertrend is likely to turn bullish. In MTF, momentum toward upper resistances ($217.80) on the 1W timeframe can be gained. BTC breaking $91,010 resistance could trigger an altcoin rally. In this scenario, invalidation is a close below $156.07 support – if this level is not held, upside probability is nullified.

Traders can monitor current charts from the AAVE Spot Analysis page or evaluate leveraged positions with AAVE Futures Analysis.

Target Levels

First target $164.26 (score 64/100), followed by $183.64 Supertrend resistance, and final $217.80 (score 67/100, score 31). This move provides approximately %38.8 return from the current price. R/R ratio could be around 1:2.5 depending on entry, but stop-loss should be placed below $156.07.

Scenario 2: Downside Scenario

Risk Factors

The downside scenario is triggered by a high-volume break and close below the $156.07 support (score 65/100). If RSI drops below 40 and MACD shows deeper negative divergence, bearish momentum accelerates. Persistent trading below EMA20 and continuation of Supertrend bearish signal increase the pressure from 3 resistances on the 1D timeframe. BTC breaking $88,368 support could fuel a general selling wave in altcoins (risk of BTC dominance increase). In MTF, with 4 resistances and 3 supports on 1W, a short-term break downward creates a chain reaction. In this scenario, invalidation is a close above $157.31 resistance – if this happens, downside is invalidated.

AAVE Spot Analysis and AAVE Futures Analysis pages facilitate risk management.

Protection Levels

First protection $143.63 (score 63/100), followed by deeper $93.94 (score 22). Reaching these levels implies up to %40 downside from the current price. For short positions, target R/R 1:2.5, stop-loss above $157.31.

Which Scenario to Watch?

Main triggers: For upside, high-volume close above $157.31 + RSI>50; for downside, close below $156.07 + MACD deepening. Confirmation signals include 4-hour candle closes, volume spikes, and BTC movements. In both scenarios, invalidation levels are clear: Below $156.07 for bull, above $157.31 for bear. Traders should adjust position sizes according to R/R and follow news flow (such as DeFi lending volumes).

Bitcoin Correlation

AAVE shows high correlation with BTC (BTC $89,354, -%1.82, downtrend). While BTC Supertrend is bearish, altcoins are under pressure; a break of $88,368 support accelerates AAVE to $143. Conversely, if BTC surpasses $91,010 resistance, AAVE upside scenario strengthens (opens path to $217). If BTC supports ($86,594, $84,681) break, watch for general altcoin sell-off; if resistances ($92,499, $94,276) are surpassed, prepare for rally.

Conclusion and Monitoring Notes

The $156-$157 range in AAVE is the decision point: Upside breakout brings rally, downside breakout brings collapse. Monitoring list: 1) $157.31 / $156.07 closes, 2) RSI/MACD divergences, 3) Volume changes, 4) BTC $88k-$91k movements. This analysis is a tool for your own decisions – market is dynamic, update continuously. Approach each scenario with 50% probability and prioritize risk management.