Aave (AAVE) has made a significant rebound in recent days, rallying 44.9% since the open of October 5th. After testing the 50% retracement level at $125 just a day earlier, the token has entered a period of sustained bullish momentum. The DeFi sector as a whole has also benefitted, with many tokens experiencing gains of 30% or more. The catalyst for this surge appears to be the optimism surrounding the U.S. presidential election, where a pro-crypto stance for the next four years has bolstered the broader crypto market.
Aave’s Bullish Momentum And Market Structure Break
AAVE’s impressive price action has been marked by a strong rally following the retracement toward $125. For the token to solidify its bullish outlook, it needs to close above $180.74. If AAVE manages to do so, it would mark a significant market structure break on the daily chart, signaling a shift to an uptrend. This breakout could validate the confidence of long-term holders (HODLers) who have weathered the recent downward momentum, particularly as Bitcoin [BTC] surged higher without AAVE initially following suit.
Despite the strong price movement, the Awesome Oscillator still reflects weak bearish momentum, showing that the altcoin’s recent price action had not fully broken free from previous downward trends. However, the On-Balance Volume (OBV) indicator paints a more encouraging picture, as it approaches a local high from September. This suggests that buying pressure is increasing, which could further fuel AAVE’s rally in the coming days.
DeFi Sector Growth Boosts AAVE’s Bullish Outlook
The broader DeFi market, in which AAVE plays a central role, has also been riding a wave of optimism. The news of a pro-crypto U.S. administration has lifted sentiment across the sector, with DeFi tokens enjoying substantial gains. AAVE, in particular, has benefited from this surge, with traders increasingly confident in the asset’s potential to break its previous highs.
The Directional Movement Index (DMI) further confirms the strength of the uptrend, as both the Average Directional Index (ADX) and the +DI line have crossed above the 20 mark. This suggests that AAVE is in the midst of a strong bullish phase, potentially setting the stage for further price action.
Key Price Levels to Watch for AAVE
Looking ahead, the next significant take-profit levels for AAVE are pegged at $245 and $290. Traders are closely watching these levels as the token continues its ascent. Aave’s recent price movement has also led to a consolidation phase, with liquidity building at $130. As the token tests these levels, more traders may opt to go long, particularly if AAVE’s price continues to break through resistance levels.
Interestingly, the liquidity heatmap reveals pockets of untested areas, including $103, which could serve as a potential target should AAVE experience a deeper pullback. However, with new liquidity bands forming at $167, $179, and $191, AAVE seems poised for another upward move if it can maintain its momentum.
Aave’s rapid recovery and bullish market structure break could signal a strong uptrend in the DeFi sector. With increasing liquidity, a positive shift in market sentiment, and key technical indicators aligning, AAVE appears set for further gains. Traders and HODLers alike will be watching closely to see if the token can hold above critical levels and reach its next price targets of $245 and $290 in the coming weeks.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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