AAVE accelerates despite mixed signals: What trend is waiting ahead?

The price movement of Aave (AAVE) is revealing clear signs of bouncing back. This altcoin has cleverly turned the recent adjustment into a springboard for a new rally.

After falling into a void left by the previous price surge, this token quickly faced strong resistance and bounced back, recording an increase of over 5% within just 24 hours.

Confluence Support

This recovery is not a coincidence. The price of AAVE has been firmly supported right at the confluence of the uptrend line and the price gap filled around the 270 USD mark — an area that has triggered a strong bounce back three times since April.

For both traders and long-term investors, this is a noteworthy area. It reflects that the market is still respecting the short-term technical structure of AAVE, despite the turbulent fluctuations last week.

Daily AAVE/USDT chart | Source: TradingView## AAVE leans towards a bullish scenario

Momentum indicators continue to reinforce the optimistic technical picture. Specifically, the Stochastic RSI of AAVE is gradually approaching the oversold zone, suggesting a potential reversal signal that could open up a new upward move.

Notably, the analysis from Bitcoin Magazine based on exchange flow data from CryptoQuant also agrees with this positive scenario. The amount of AAVE withdrawn from exchanges is shrinking, indicating that the flow of tokens leaving the platform is decreasing.

This development somewhat reflects a cautious mindset: large investors seem to be in no rush to increase their accumulation, but are waiting for the right moment to act.

Source: CryptoQuant## Liquidity cools down, caution signals

However, data from the Spot market is sending out noteworthy warning signals. The trading volume is currently lower than in the early part of the month, indicating a clear slowdown.

Observing from the bubble map, trading activity shows signs of cooling down, suggesting that the AAVE market may be entering a "resting" state. Nevertheless, considering historical factors, this lull is not necessarily a negative signal. On the contrary, the decrease in trading volume may reflect the patience of investors as they await clearer confirmation signals regarding the upcoming trend.

Source: CryptoQuantOverall, with technical indicators still supporting the bulls along with supportive on-chain data, there is a high probability that the current uptrend of AAVE will be maintained in the short term, at least until there is a clearer change in market structure.

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