- AAVE saw a breakout rally following an anticipated descending wedge reversal.
- Open Interest and Development Activity displayed uptrends. What does that tell about AAVE’S price?
AAVE’s latest southward action stopped after buyers triggered pressure to catalyze a patterned breakout within the past few days. Bears were yet to surrender their dominance from a long-term standpoint, especially as the price hovers beneath the 200 Exponential Moving Average.
The ongoing breakout rally might support buyers to trigger green candles. While publishing this content, AAVE traded near $82.21957, following a 3.3% gain within the past day.
Can Bulls Sustain Upside After the Falling Wedge Break
AAVE dipped into a bearish track beneath the 20 and 50 Exponential Moving Averages on the daily chart. That came after the alternative token reversed from the resistance at $115 during mid-August sessions.
The emerging rally comprised a classic declining wedge pattern on the charts. Moreover, the alternative coin entered a low volatility period while squeezing near the falling wedge’s apex. A bullish hammer candle confirmed the buyers’ plan to trigger a rally.
Moreover, the bullish engulfing candle catalyzed the buying rebuttal and supported AAVE to break beyond the 20-50 Exponential Moving Average. Rebound from the nearest support might expose AAVE to extended surges in the upcoming sessions.
That would see potential targets resting around the $92 value area. Nevertheless, buyers should watch for potential bullish crossovers around the 20-50EMA before executing long positions.
Moreover, the OBV hadn’t overpowered its closest resistance. Furthermore, recent weeks saw the on-balance volume bearishly diverging with AAVE’s price. A significant close beyond these hurdles might open the gates for solid recoveries.
Increased Open Interest and Development Activity
Surprisingly, the price massively correlated with the network’s development activity for more than six months. Nevertheless, the same showed divergence since late July. The price could not follow AAVE’s solid activity.
Furthermore, assessing the alt’s futures Open Interest confirmed a bullish signal. It witnessed a more than 38% hike within the previous day, whereas the price surged around 3.3%. Strangely high open interest might confirm potential reversals.
Lastly, AAVE had a 46% monthly correlation with the leading crypto, Bitcoin. Thus, investors should watch BTC’s actions to execute profitable bets.
