Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- AAVE hit a previous support-turned-resistance zone.Â
- Open Interest rates dipped as sellers regained control.
Aave [AAVE] could be at the mercy of sellers if the press-time bearish pressure creeps into the weekend. The altcoin dipped to $61.5 in early August amidst elevated market uncertainty, but was bolstered by Bitcoin’s [BTC] recovery around 7-10 August. But the +11% tucked after gracing $69 was at stake after BTC’s sharp reversal.Â
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Are more losses likely?
At the time of writing (Asian afternoon trading session on 11 August), the bulls had lost the strength to push forward, as illustrated by the Relative Strength Index’s rejection at the neutral level. It shows the building selling pressure, which could tip the scale in favor of sellers in the next few hours/days.Â
Similarly, the CMF crossed the zero mark but had a downtick, suggesting eased capital inflows. The readings suggest building bearish sentiment, which could increase if BTC overstays below $29.5k.Â
If so, AAVE could head lower to the bullish order block of $57- $62 (white). Such a move could offer shorting opportunities with modest gains.Â
A candlestick session close above the bullish breaker block and resistance zone ($71) will invalidate the bearish thesis.Â
Open Interest rates dipped
The recovery between 7-10 August was matched by rising CVD (Cumulative Volume Delta), illustrating that bulls were in complete market control. But their control waned post-CPI data release. The metric retreated, indicating sellers sought entry after AAVE hit the resistance zone.Â
How much are 1,10,100 AAVEs worth today?
But Open Interest rates never flipped, even during the recovery period. It shows demand for AAVE in the derivatives market declined over the same period.
The stark divergence in the last few days has set AAVE for reversal, which could be accelerated if BTC remains below $29.5k. Sellers could push AAVE lower to $62.Â
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