AAVE Price Down by 4.5% – Time to Buy AAVE Coin?
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- Stani Kulevchov announced that the DeFi protocol would build a mobile wallet this year.
- The rising strength of the US dollar added negative pressure on AAVE/USD prices and kept the gains lower for the day.
- A spike in demand above $254 and a 50 EMA crossover could drive an upswing in AAVE.
On Tuesday, the AAVE is trading with a slightly bearish bias, having lost over 4.5% during the early European session. The day before, AAVE/USD closed at $266.60 after setting a high of $285.65 and a low of $262.76. AAVE/USD kept on moving under consolidation on Monday but turned green for the day amid some positive developments surrounding the AAVE ecosystem.
With growing interest in blockchain and crypto as a whole, this might be a good opportunity to buy AAVE and rise with the market.
AAVE protocol to expand in 2022
The team behind Aave Protocol has decided to expand its network in 2022. On January 3rd, the founder of Aave, Stani Kulevchov, announced that the DeFi protocol would build a mobile wallet this year, which added positive momentum across the AAVE ecosystem. Aave is a DeFi protocol where people can borrow and lend cryptocurrency, and users can contribute to the various lending pools on the platform to earn interest. The protocol was built on Ethereum, but as it continued to scale its market, it was also deployed on other blockchains like Avalanche, Polygon, Uniswap, Gelaton Network, and Balancer Labs. However, it seems like Aave is not stopping here and has plans to expand further. This year, the protocol will launch a mole wallet to expand to Sushiswap and Curve Finance.
Team set to expand Curve Finance and SushiSwap
To scale its business, it plans to expand to Curve Finance and SushiSwap. Scaling the AAVE protocol, in fact, has the potential to increase AAVE’s user base while increasing on-chain activity on the platform. The protocol’s origin team just created a cross-chain governance bridge. This will assist the protocol in being regulated across many networks by the mainnet governance. In addition, the AAVE community is working on providing gasless voting and making governance accessible to all network users. Overall, with a set of aims for the first quarter of next year, AAVE appears to be gaining traction, particularly in terms of ecosystem-centric advancements. The news of adding a mobile wallet booster to Aave’s user base and increasing its on-chain activity ultimately pushed AAVE/USD prices higher.
The stronger dollar continues to drag AAVE/USD lower
On the other hand, the rising strength of the US dollar added negative pressure on AAVE/USD prices and kept the gains lower for the day. As a result, the US dollar was high on the board as market participants were excited about the upcoming rate hikes this year as promised by the Federal Reserve in its latest Fed meeting. The Federal Reserve has said that it will increase interest rates three times this year to mitigate the effect of inflation that it has been facing for the past several months. The strength of the US dollar kept AAVE/USD gains limited as both have a negative correlation.
Daily Technical Levels
Support Resistance
257.69 280.58
248.78 294.56
234.80 303.47
Pivot Point: 271.67
AAVE technical outlook – 50 EMA extends resistance at $262
On the technical front, the AAVE/USD coin forecast remains bearish below the $262 resistance level. This trading level is being extended by 50 days exponential moving average. On the 4-hourly timeframe, the 50 EMA is extending resistance at $262, keeping the AAVE/USD under selling pressure. Since the AAVE/USD has already violated an upward trendline at $262, the selling bias dominates.
On the bearish side, AAVE’s immediate support prevails at the $254 level, and a break below this can lead the coin towards the $240 or $230.47 support zone. If the coin breaks through $230, it will be vulnerable to a drop to $224 or even lower.
The leading technical tools like RSI and Stoch RSI are in support of a selling bias, while the 50 EMA is also suggesting a selling trend. Thus, the trader’s focus will be on the $254 support level, as the violation of this will help us capture a quick sell trade.
What’s next?
A spike in demand above $254 and a 50 EMA crossover could drive an upswing in AAVE. On the higher side, the AAVE/USD may find the next resistance at $270. A bullish crossover above this can expose the coin towards the 286 double top resistance level. Let’s keep an eye on $254 to stay bullish and vice versa.
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