AAVE rebounds 17% and tests 9-month downtrend; breakout hinges on $85-$88
AAVE has rebounded about 17% from its Wednesday low near $72 to trade around $82, as renewed DeFi buying and short-covering lift sentiment. The price is now testing a key long-term resistance: a nine-month descending trendline on the daily chart.
Technically, AAVE bounced from the $72-$75 demand zone and is pressing against the trendline near the $85 area. Bulls need a daily close above the $85-$88 resistance band to confirm a breakout; if that happens, the next upside targets cited are around $102, then $132. If AAVE rejects the trendline, traders expect a potential retest of $72-$75.
On lower timeframes, AAVE has broken above a multi-day consolidation near $77.7 and reclaimed its 20/50/100/200 day moving averages (cluster roughly $71-$76). Momentum also improved: daily RSI moved back above 60 and MACD completed a bullish crossover, while 4-hour RSI rose toward the upper-60s.
Derivatives and on-chain flow support the recovery. The selloff appears tied to an unwind of bearish positioning, forcing shorts to cover as AAVE regained resistance levels. Fresh USDT deposits into Aave’s lending markets increased available liquidity. Open interest rising alongside positive funding rates suggests traders are adding long exposure rather than only reacting to liquidation rebounds.
Macro remains mixed, with a “higher-for-longer” Fed stance and a firm US dollar still weighing on risk appetite. Over the next sessions, traders will watch whether AAVE converts the bounce into a confirmed breakout above $85-$88 or falls back toward $72-$75.
Bullish
The news is broadly bullish for AAVE because the token is already acting on a constructive technical and flow mix: (1) a strong ~17% rebound off the $72–$75 demand area, (2) reclaiming multiple key moving averages on the 4-hour chart, and (3) improving momentum (RSI/MACD) alongside supportive derivatives and on-chain signals.
In similar past setups, tokens that regain key moving averages and then challenge a higher-timeframe downtrend line often convert early strength into a range expansion—provided price can secure a daily close above the resistance band. Here, that “trigger” is the $85–$88 zone. If AAVE clears it, traders typically follow through toward the next resistance levels (the article cites $102, then $132). That would likely attract additional systematic buyers and momentum funds.
However, the bullish thesis is conditional: a rejection near the nine-month downtrend line can quickly turn this into a failed breakout, sending AAVE back to $72–$75 for another liquidity test. On the market-stability side, rising open interest with positive funding suggests long-building rather than purely liquidation-driven relief, which generally supports steadier upside follow-through—though higher-for-longer rates and a firm USD can cap speculative rallies.
Net: positive near-term catalysts and improving positioning make the expectation skew bullish, but traders should respect the binary risk around $85–$88.