Aave price risks a 25% plunge as a classic bearish reversal pattern emerges
A handful of concerning factors, plus AAVE’s correlation with the Nasdaq, increases the possibility of the altcoin undergoing another massive sell-off.
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Technical analysis suggests that a recent uptrend in the price of Aave (AAVE) is showing signs of exhaustion based on early development of a classic bearish reversal pattern.
Is AAVE headed to $70?
Dubbed a "rising wedge," the pattern surfaces when the price rises inside a range defined by two ascending, converging trendlines. As it happens, the trading volume declines, pointing to a lack of conviction among traders when additional buying is needed for continued upside momentum.
Therefore, falling wedges typically result in a bearish breakout where the price breaks below the pattern's lower trendline and falls by as much as the maximum distance between the wedge's upper and lower trendline.
AAVE has been painting a similar pattern amid its sharp upside move from nearly $61.50 on May 12 to over $93.50 on May 17. If a sustained breakdown pans out, AAVE will fall by at least $27, which is the wedge's maximum height, as shown in the chart below.
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