AAVE Price Correction to $80 Gains Traction Amid $300M Liquidation Wave

Sahil Mahadik
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CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

Highlights

  • AAVE price is heading to $80 support backed by a long-coming ascending trendline to recuperate bullish momentum.
  • Aave experienced its largest-ever liquidations of nearly $300 million during ETH fall to a $2116 low last week.
  • A flattish trendline in 100-and-200-day EMA indicates a mid-term sideways trend.

The AAVE price witnessed a temporary ease from selling pressure on Monday’s trading session, registering a 3% rise to $94. However, as the pioneer cryptocurrency, Bitcoin struggled to sustain above $60000, the altcoin market witnessed an intense overhead supply, signaling the potential for a prolonged downfall.

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AAVE Price Loses Key Support As Massive Liquidations Sweep the Market

Aave, a prominent DeFi lending protocol, witnessed its highest-ever liquidation of $300 Million last week as the ETH price dipped 25%. The downward trend, bolstered by a broader market sell-off, triggered major liquidations of stablecoin loans collateralized by wrapped staked ETH (wstETH). Amid the unprecedented event, the AAVE price breaks below $100 support.

However, the recent tweet from Intotheblock highlights the volatility that also benefited protocol by generating $6 million in profits for the Aave DAO. The event underscores decentralized finance platforms’ risks and robustness in managing extreme market conditions.

In addition, the AAVE network has experienced a notable 28.83% rise in short-term traders over the past month. This surge suggests an influx of new users and short-term speculators entering the market, likely attracted by recent market volatility and opportunities for quick gains.

Short-term traders | intotheblock
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AAVE Price Poised For Prolong Downfall

The AAVE price witnessed a high momentum correction amid the recent market sell-off, displayed by a V-top reversal in the daily chart. The bearish turnaround plunged the asset from $118 to $93.7, accounting for a 20.6% loss.

The falling price recently plunged below the daily Exponential moving averages (20, 50, 100, and 200), indicating sellers are strengthening their grip over the altcoin. If the sustained selling, the AAVE price could plunge 14% to hit the long-ascending trendline at the $80 mark.

This dynamic support since September 2023 creates a high accumulation, and a break below it could trigger a major downfall.

On the contrary, the falling AAVE price is backed by decreasing volume action, indicating traders’ lack of interest in entering short positions. This signal often leads to a reversal from major support or resistance.

AAVE Price
AAVE/USDT – 1d Chart

Therefore, if the coin price sustains above the support trendline, buyers could counterattack and regain the $100 mark.

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Frequently Asked Questions (FAQs)

1. What impact did the liquidation event have on the Aave protocol?

Despite the liquidations, the Aave protocol generated $6 million in profits for the Aave DAO, showcasing its robustness in volatile conditions.

2. How has the AAVE price been affected by the liquidations?

The AAVE price dropped below the $100 support level, with potential to decline further to $80 as it seeks stable support

3. Which are the major resistances for AAVE?

The $118 and $132 stand as immediate resistance for LINK recovery.
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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.