AAVE is currently testing a critical area after experiencing a prolonged downtrend marked by a Descending Trendline from its peak above $300. On the 2D timeframe, price has successfully bounced from the major low around $57 and is now showing signs of recovery toward the primary descending resistance line.
📌 This structure is particularly interesting because price is approaching a potential breakout point from the medium-term bearish trend that has been in place for several months.
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🔍 Chart Structure Analysis
📐 Descending Trendline
The descending trendline connecting a series of lower highs since August 2025 remains the key resistance level.
Characteristics of this pattern:
✅ Indicates strong seller dominance over the past several months.
✅ Every previous rally attempt has been rejected by the trendline.
✅ The more frequently resistance is tested, the higher the probability of an eventual breakout.
🔥 AAVE is currently making another attempt to challenge this trendline resistance.
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🎯 Key Resistance Zones
Several important resistance levels can be identified on the chart:
🟡 $89.50
🟡 $102.50
🟡 $115.50
🟡 $126.50
🟡 $145.70
📈 These levels could act as step-by-step upside targets if a breakout is confirmed.
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🚀 Bullish Scenario
The bullish case becomes stronger if:
✅ Price successfully breaks and closes above the Descending Trendline.
✅ Trading volume increases during the breakout.
✅ The $89.50 level is reclaimed and confirmed as new support.
Bullish Targets:
🎯 Target 1: $102.50
🎯 Target 2: $115.50
🎯 Target 3: $126.50
🎯 Target 4: $145.70
🚀 A confirmed breakout above the trendline could signal a major shift in market structure from bearish to bullish on the medium-term timeframe.
💡 The stronger the breakout volume, the greater the probability of a sustained rally toward the targets above.
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📉 Bearish Scenario
The bearish outlook remains valid if:
❌ Price fails to break above the Descending Trendline.
❌ Strong rejection occurs near resistance.
❌ Price falls back below nearby support levels.
Bearish Targets:
⚠️ Retest of the $76–$70 area.
⚠️ Potential decline toward the major support zone around $57.
⚠️ Risk of continuation of the long-term downtrend if selling pressure returns.
📍 As long as the descending trendline remains intact, the broader bearish trend should still be considered active.
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🧠 Conclusion
AAVE is currently approaching a decisive moment. After a prolonged decline, price is now testing the Descending Trendline, which has acted as a major resistance level for nearly a year.
🚀 A breakout above this trendline could open the door for a recovery move toward the $102–$145 range over time.
📉 However, until resistance is convincingly broken, traders should remain cautious of the possibility that the broader bearish trend may continue.
🎯 Waiting for a confirmed breakout or clear rejection remains the most prudent approach before considering aggressive positions.
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⚠️ Disclaimer
📚 This analysis is for educational purposes only and should not be considered financial advice.
💰 Always practice proper risk management, use stop-loss protection, and conduct your own research before making any trading decisions.
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