What Next for AAVE Following Bullish Morning Star Candle Setup?


AAVE saw another northward move on its daily chart after creating renewed peaks beyond 23.6% FIB retracement. A closing above the 38.2% FIB zone would propel AAVE to new highs near the $207 value area. Such a move could eventually clear the path towards the 200 Exponential Moving Average and $224.

On the other side, bears may plan an attack near $193 - $207 to prevent extended upside for the token. While publishing this blog, AAVE traded near $193.55.

Aave Daily Chart

The alternative currency remains within a long-term tilt as AAVE struggled to overcome the bonds of an 8-month trend-line resistance. As bulls defended the $112 zone for about 13 months, AAVE recorded an approximately 130% ROI from this flow in an upward channel rally.

The altcoin broke down from the ascending channel following a rebound from 61.8% FIB area and the Point of Control. As a result, AAVE saw a bullish resurgence around the month-long trend-line support. Remember, bulls emerged after a more than 40% fall from April 1 to April 12.

Bulls appear prepared to keep their edge following a bullish morning star candle formation on the daily price chart. That had buyers reclaiming their space beyond the EMA ribbons. For now, bulls should overcome $193 and close beyond the mark for upsurges towards the 200 Exponential Moving Average. A sudden buying pressure fading would see the 20 Exponential Moving Average providing the nearest testing point.

Reasoning

The RSI's higher highs translated to a climb beyond its equilibrium. A close past the 56-resistance would cement chances of bullish continuation on AAVE's price charts. Moreover, the Aroon ups stayed at its base, whereas the Aroon down kept its southward action. Such readings show a bullish continuation likelihood in the coming days.

Meanwhile, the on-balance volume formed consistent higher highs over the past two weeks. Also, the OBV diverged with the price peaks. Thus any reversals in AAVE prices may catalyze a bearish divergence.

Final Thought

Considering optimistic readings on the Aroon indicator and daily RSI plus the EMA ribbons position, AAVE could continue its uptrends in the upcoming days. Meanwhile, the threats by the OBV could lead to a near-term setback before the bulls attempt to regain momentum.

Nevertheless, AAVE has a 65% monthly correlation with BTC. Thus, interested individuals should watch Bitcoin's bias for profitable bets.