AAVE Price Could Skyrocket To $3,500 — What’s The Reasoning?
The past week was one of two distinct halves for the AAVE price, which initially kicked off with a bearish downturn beneath the $300 mark. The DeFi coin has since shown strong signs of recovery, jumping to as high as $340 on Friday, January 31st.
Based on its latest price setup, the AAVE token looks set to be one of the best performers in the crypto market this February. However, a crypto analyst has clarified that it might not be a smooth sailing journey for the AAVE price over the next few months.
Here’s How AAVE Could Reach Its High In This Cycle
Prominent crypto trader Ali Martinez took to the X platform to share an exciting bullish projection for the price of AAVE. According to the pundit, the DeFi coin could be readying for an over 6,400% rally before the end of this current cycle.
This bullish prediction is based on the action of the AAVE’s price around a TD (Tom Demark) Sequential resistance trendline. The TD Sequential indicator is a tool used in technical analysis to identify the exact time of trend exhaustion and price reversal for a specific token.
However, the TD Sequential indicator can also generate trendlines, which can serve as crucial resistance and support levels for price. These levels are determined using the extremes of the first candle in the Setup phase of TD Sequential.
In the last cycle — specifically in 2020, the AAVE price breached the TD Sequential resistance trendline (represented as the black dots in the chart above). This singular action was followed by a 6,400% rally, which saw AAVE reach its current all-time high price of $661 in 2021.
As it stands now, the price of AAVE is testing a similar resistance trendline around the $350 level on its monthly chart. If the price successfully breaks through this resistance zone — and history holds true, AAVE could witness a move to $3,500.
AAVE Price In The Short Term?
As of this writing, AAVE’s price stands around $337, reflecting an almost 7% increase in the past 24 hours. According to data from CoinGecko, the altcoin is down by 1% in the last seven days.
While AAVE’s future looks incredibly bullish, there are certain obstacles the DeFi coin might need to overcome sooner than expected. According to Martinez in a separate post on X, the AAVE price faces two key resistance zones at $243 and $365, where investors purchased 1.3 million and 971,000 tokens, respectively.
Martinez noted that breaching these supply barriers is crucial for AAVE’s bullish breakout and a potential run to a new all-time high.
Featured image from Binance Academy, chart from TradingView
