- A well-known analyst has identified a sell signal for AAVE, which could result in an average price drop of 27%.
- On-chain metrics showed that the asset is overvalued.
Aave (AAVE) has seen high buying volume from whales recently. Lookonchain noted that whales have purchased millions of dollars worth of AAVE since August 20.
One whale in particular bought $10.4 million worth of AAVE in less than a day.
This accumulation trend among addresses was a positive sign for AAVE. Nevertheless, the price was rejected by the $140 resistance zone, which marked the local high in March.
A deep setback is likely
Source: Ali on X
Crypto analyst Ali Martinez posted on X (formerly Twitter) that the TD Sequential issued a sell signal on AAVE’s daily chart, resulting in an average decline of 27%.
If such a correction were to occur, Aave would fall to the $100 mark.
Source: AAVE/USDT on TradingView
The daily time frame showed strong bullish structure and momentum. The OBV also hit a new high, suggesting significant buying volume behind the rally.
However, despite all the positive signs, the AAVE cryptocurrency still remained stuck in the $140 resistance zone, which marked the March highs.
A series of Fibonacci levels were recorded based on the July rally. They showed that $142.58 also represented the 100% extension of that move, underscoring the strength of resistance here.
AAVE’s mixed signals, explained
Source: Santiment
The 30-day MVRV was the highest since early March. Short-term holders took profits, which could lead to selling pressure. The average coin age did not show a consistent trend over the past month.
Realistic or not, here is AAVE’s market cap in BTC terms
On the other hand, the declining average dollar age invested has been a big positive. It signals increased token circulation and new investments and is a bullish signal.
Therefore, a correction towards $105-115 followed by a recovery seemed likely for Aave.
