AAVE Crypto Flashes Sell Signal: What Should AAVE Holders Do?

• AAVE correction targets $264 and $203 as TD Sequential warns of short-term weakness.
• AAVE price gained 2% intraday and is eyeing a breakout from the $300 mark.

The crypto market has witnessed mixed cues over the past week, with AAVE crypto breaching the $300 support level. However, AAVE price held on to the 50-day EMA mark and sustained the upward momentum.

Amidst the change in market sentiment, the TD Sequential indicator is reflecting a sell signal that could fuel a price correction.

At press time, AAVE price was trading at $290.20, noting a 2.20% spike in the past 24 hours. Its market cap has risen to $4.35 Billion, ranked 31 in the overall crypto market.

TD Sequential Indicator Flashes a Sell Signal

A popular crypto analyst, Ali Martinez posted a tweet on X pointing out a sell signal flagged by TD Sequential Indicator.

According to the analyst, AAVE crypto could be heading towards the $264 and $203 support levels.

However, the altcoin was holding gains above the 50-day EMA mark with the downside correction wave yet to be triggered.

If AAVE price breaches the prompt 78.6% Fibonacci support zone of $280, it could see a significant drop ahead.

Meanwhile, the TD Sequential indicator is considered to be quite accurate. Therefore, investors must remain cautious, as a price correction might be on the horizon.

On-Chain Metrics Signal Reduced Interest

Data from IntotheBlock showed a decline in the network activity, with the number of daily active addresses dropping over 8.95%, whereas the new addresses have lost their interest and have dropped by 12.67%.

This significant decline indicates reduced investor interest and demand for AAVE. It also points toward a bearish sentiment.

AAVE’s Market Dominance in DeFi Reinforces Investor Faith

In DeFi space, AAVE is on the top, which places it at the position of the leading players at the momentum. According to DeFiLlama,  AAVE has a total value locked (TVL) of $20.437 Billion, ahead of competitors like Uniswap V3, Verus Market, JustLend, and Spark.

Even though the TVLs on these platforms ranged from $5 Billion to $500 Million and below, AAVE remained one of the largest and most prominent players within the entire DeFi sphere. That being said, this stable performance does point to the idea that investors still view AAVE as a utility driven token.

Thanks to the stable TVL of AAVE and current market trends, the token is gradually positioning itself not only for short-term TVL and trading but also for more long-term treasury storage.

AAVE Price Analysis: Key levels to Watch

The weekly price action analysis shows that AAVE crypto has maintained the upward momentum and traded above the key EMAs, guiding the bullish outlook.

However, it has remained in a range for the last three weeks. Following a rejection around the $400 resistance mark, it made an inverted hammer candlestick and remained in a congestion zone.

Until the $360 barrier is breached, AAVE crypto is probably going to continue its narrow-range movement. Moreover, the bulls need to defend the immediate support zone of $280 to manage the uptrend. If the $280 support level caves, a trend reversal could follow.

Disclaimer

This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.