Aave (AAVE) price has broken out from a descending resistance line in what is likely the first stage of a longer-term upward movement.
AAVE price had been falling underneath a descending resistance line since reaching a high of $115.8 on Aug. 13. The downward movement led to a minimum price of $64.7 on Oct. 13.
Initially, it seemed that the downward movement caused a breakdown from the $71 horizontal support area. However, the price reversed trend immediately, bouncing and creating a long lower wick in the process (green icon).
Shortly afterward, the AAVE price broke out from the line, indicating that the preceding correction is complete. The breakout and ensuing upward movement led to a high of $90.1 on Oct. 23 before being rejected.
The main resistance area is found between $90.50 and $96.60. This is the 0.5-0.618 Fib retracement resistance and a horizontal resistance area.
It is worth mentioning that technical indicators support the continuation of the upward movement. The breakout was preceded by bullish divergence in the daily RSI (green line).
The indicator is now above 50 and increasing. This is a sign that supports the legitimacy of the breakout and continuation of the upward movement.
AAVE Price Could Reach $135
In similar fashion to the RSI, the wave count provides a bullish outlook. It shows that the AAVE price is likely in wave C of an A-B-C corrective structure (black). If so, giving waves A:C a 1:1 ratio would lead to an AAVE future price prediction of $135.50. The sub-wave count is given in red.
At the current time, it is not certain if the movement is an A-B-C structure or a new bullish impulse. However, in both cases an increase towards at least $135.50 would be expected.
Conversely, a decrease below the wave B low (red line) of $64.70 would invalidate this bullish AAVE price prediction.