Following mild recovery of DeFi, Aave gaining some traction on market
Following the market recovery, Aave successfully gained a foothold above the local resistance level of the 50-day moving average despite the problematic performance of its competitors like Cardano and XRP.
According to the daily chart of the token, Aave has successfully moved through the 50-day moving average and gained a foothold above it after a few days of consolidation. The breakout on Oct. 18 was the fourth attempt of the token to break the downtrend. Unfortunately, it is too early to say that Aave made it through the downtrend.
Volume speaks for AAVE
According to volume profiles, bears were slowly losing power and could not push Aave down any longer. Descending volume during downtrends is one of the most important signals for a reversal. After the breakout, we are seeing a reversal in volume profiles, which shows that AAVE could be entering a reversal despite the problematic conditions of the market.
It is important to note that the reversal on volume profiles for Aave is nowhere near explosive, which shows that the change in the behavior of investors is purely technical and no major factors that would push Aave to new highs in almost no time appeared on the market.
The next threshold Aave must conquer is the 200-day moving average. By breaking through that point, the token would surge to the MA crossing, creating a strong reversal signal and possibly attracting fresh funds to Aave.
In the last few weeks, we saw a mild recovery from the DeFi industry, which could be one of the main factors behind Aave’s recovery on the market. However, it is hard to tell if decentralized finances are coming back, which is why betting on a full trend reversal on assets like Aave remains risky.