Aave [AAVE] In a wider market slide, AAVE broke through the support of $100 and dropped to $96. This was a new low for a period of three weeks. In fact, at press time, AAVE traded at $97, down 7.7% on the daily charts, while the market cap fell by over $200 million.
As a result, altcoins fell below their short-term Moving Avgs, 9 and 21 day MAs, indicating strong downside pressure.
The AAVE falls below $100
The crypto markets retraced. AAVE The market turned negative and participants started to aggressively exit the markets, thus accelerating downward momentum.
Bulls vs. Bears turned negative in fact after being positive more than one month. This metric is negative when it indicates that the sellers are dominating and pushing out buyers.
Moreover, the exchange activity echoed that seller dominance. CryptoQuant’s data shows that 79k AAVEs entered exchanges and 74k left.
Netflow, an altcoin, has now been in the positive territory for six days, indicating that the sellers are still dominating the market.
In response, as I write, the Exchange Supply Ratio of this altcoin has increased to a high monthly level of 0.137. This is indicative of an increase in selling. This kind of increase in ESR is often a sign that scarcity has been reduced, increasing the available supply for sale.
This setup has led to a strong decline in prices.
What are the indicators of momentum?
AAVE’s price has been falling rapidly and sellers have outpaced buyers. The altcoin’s Relative Strength Index has fallen further into the bearish zone since then. It was at 34 when we went to press.
As the RSI approaches oversold territory this indicates sellers control the market while buyers are largely stepping back. Such market conditions tend to increase the downward momentum of prices.
AAVE may fall to as low as $92 if the sellers keep dumping goods on the market.
If the bulls are able to reclaim the $100 and the market begins cooling down, then the altcoin may be a catalyst for a recovery. Bulls must flip $100 to reclaim both the 9-day MA at $107, and 21-day MAs, which are $110 and $107, respectively, for any significant trend reversal.
In the event that you do not, your altcoin is likely to enter a long-term bearish phase and stay below $100.
Final summary
- Aave dropped 7.7%, breaching $100 and dropping to a three-week low of $96.
- AAVE was under intense pressure from bears who outpaced bulls and increased the downside risk.
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Source: ambcrypto.com
