The Aave (AAVE) market experienced significant declines in the previous week with a 17.07% drop in price, based on data from CoinMarketCap. Despite some stability seen in the last 24 hours, certain market indicators suggest that the bearish trend might not be over yet.
Potential 30% Crash for AAVE If Signal Holds
In a recent update on X, cryptocurrency analyst Ali Martinez shared a bearish forecast for the AAVE market. Martinez pointed out that the TD Sequential indicator has signaled a sell on the AAVE weekly chart, indicating a potential major downturn ahead.
The TD Sequential, created by Tom DeMark, is used in trading to identify possible reversals in price movements. It signals when an asset’s price has been stretched in one direction and is due for a change.
According to Martinez’s analysis, if the TD Sequential sell signal remains valid, AAVE could see a significant correction, dropping to around $264 or even lower to $203, representing a potential decline of 29.5% from the current price.
Further supporting this bearish outlook are other indicators. The Relative Strength Index sits at 62.57, indicating that AAVE still has room to fall before reaching oversold levels. Additionally, the asset’s 100-day simple moving average is below the current price, signaling further bearish sentiment. Caution is advised in the current market environment. As of now, AAVE is trading at $290.04, showing a minor gain of 2.48% in the last 24 hours. However, trading volume has dropped by 48.99%, possibly indicating a reduction in selling pressure.
Aave to Introduce V4 Upgrade
Despite the price challenges, the Aave protocol continues to make progress. Recently, Aave achieved a record $35 billion in net deposits, marking its highest value since 2021.
Additionally, the DeFi protocol is gearing up for the launch of its V4 network upgrade, which promises advanced risk management tools and unified liquidity, among other features. According to data from DeFiilama, AAVE remains the second-largest DeFi protocol with a Total Value Locked (TVL) of $20.4 billion, trailing only behind Lido Finance with a TVL of $31.60 billion.
