- Aave rejected at $295–$305 resistance, aligning with the descending supply trend and horizontal rejection zone.
- Backtracked volume indicates low belief, maintaining the price movement in a neutral-to-bearish form.
- Bulls will need to recover $305-$315 and high volume to reverse bias otherwise we may hit back to $245-$260 support.
Aave is still trading under a key resistance band, indicating continued selling momentum in a corrective setup. Although the short-term gains and positive weekly performance have been recorded, the larger trend is still apprehensive because the bulls have a series of technical difficulties.
Dual Resistance Blocks Upward Momentum
The daily chart reveals a rejection from both the underside of a lost horizontal support and a descending supply trendline. According to Cheds Trading, this setup exemplifies “underside test and fail” behavior, where former supports act as magnets for failed retests. The $295–$305 range, once a strong support base, has turned into resistance since September’s breakdown.
Recent daily closes below this zone confirm that sellers remain active. The descending trendline guiding lower highs since mid-August reinforces this pressure. These converging resistance levels form a supply cluster, often used by traders to exit positions or initiate shorts. Until the price establishes acceptance above $305, short-term rallies are viewed as reactive rather than structural recoveries.
The Bollinger Bands display a compression phase, with the middle band near $285 serving as dynamic resistance. Continued rejection below this level signals limited upside momentum. Unless the price expands beyond $335, the bias remains cautious.
Volume Weakness Clouds Short-Term Rally
Market data as of writing, shows Aave trading near $291.10, reflecting a 1.67% daily gain and a market cap of $4.43 billion. While price recovered from intraday lows below $285, trading volume declined by 30.57%, now at $317 million. This divergence—rising price with falling volume—suggests a tentative rebound lacking strong participation.
The Volume-to-Market Cap ratio of 7.14% remains steady but signals that conviction is not yet sufficient to confirm a breakout. The Fully Diluted Valuation of Aave at $4.65 billion is slightly below its current valuation, which suggests that there will be no significant inflationary force due to the supply of tokens.
The traders are not convinced yet and are selling off earlier rallies despite the warming up of the mood. Any upward movement beyond $295 might not hold without more vigorous volume confirmation. Sustained buying pressure is essential to invalidate the current corrective structure.
Support Levels and Long-Term Structure
The primary support zone lies between $245 and $260, an area repeatedly defended since July. Each rebound has been progressively weaker, suggesting potential demand fatigue. The inability to reclaim the $300 level may result in another trip back to this base with a daily close of less than $245 opening up the prospect of the 200-day SMA of around $220.
From a fundamental perspective, Aave retains robust on-chain metrics. The protocol holds a Total Value Locked of $44.97 billion, and its Market Cap/TVL ratio of 0.0987 suggests the token remains undervalued relative to network activity. The circulating supply of 15.25 million AAVE out of 16 million total reinforces scarcity over time.
To shift the bias upward, bulls must reclaim and sustain levels above $305–$315 with expanding volume. Such a move would break the lower-high structure and allow potential upside toward $340–$360. Until then, traders view rallies as opportunities to manage risk around established resistance zones.
