AAVE: Post-Crash Fade Setup — Short the 222–223 Retest, Target 212

Executive summary and context

• Instrument: Aave (AAVE)
• Current price (spot): 220.76
• Timeframe read: Daily primary trend, 4h/1h timing and execution
• Core view for next 24h: Bearish bias. Expect a retest of 218.5 → 216 area, with risk of extension toward 212 if 218 breaks; limited topside to 222–224 before supply reappears.

1. Price action and structure (multi-timeframe) Daily trend

• From late Aug peak (382.93 on 2025-08-23) AAVE has been in a persistent series of lower highs/lower lows. A capitulation-style down day on 2025-10-10 (intraday low printed 109.73, close 226.31) expanded volatility and reset levels.
• Subsequent bounce attempts: 10/11–10/13 recovered to 261.16 but failed; 10/17 set a new closing swing low at 206.33; 10/18–10/20 bounced to 229.06 (supply zone below 235), today rolling over again.
• Structure: Clear descending channel since mid-Sep, with the most recent rally failing beneath prior resistance, preserving the bearish market structure.

4h/1h intraday

• 10/21 hourly tape: Break below 223.5 → print 219.16; feeble bounce to 221.50; last at 220.76. This intraday pattern is distributive (lower highs, weak bounces), consistent with supply capping rallies.
• Notable micro-levels from the tape: 223.5 (prior pivot/support turned resistance), 221.5 (intraday LH), 219.2 (intraday low), 218.6 (hourly print), 216.7/214.9 (nearby daily supports), and 206.3 (swing low).

2. Support/Resistance mapping (confluence)

• Overhead supply: 229–235 (10/20 close/10/20 H 235.37, 38.2–50% retrace of the 10/13 → 10/17 leg), then 241–244, then 255–262.
• Near-term resistance: 221.5 (intraday LH), 222.8–223.5 (breakdown/retest band), 227.6–229.1 (daily supply shelf).
• Supports: 219.7 (Classic S1 from 10/20 pivots), 218.6–219.2 (today’s intraday prints), 216.7, 214.9 (10/18 close), 211.9, 210.4 (Classic S2), 206.3 (key swing low).

3. Trend and moving averages

• 5D SMA ≈ 219.6; price slightly above, indicating a minor bounce within a bigger downtrend.
• 10D SMA ≈ 234.1; price below → short-term trend still bearish.
• 20D SMA (basis for BB) trending down materially (approx upper-280s/low-290s after the crash), with price well below → dominant downtrend.
• 50D SMA likely ~300+ and falling; no sign of medium-term trend reversal.
• Short-term slope: negative. No bullish MA crossovers; 5D remains below 10D.

4. Momentum oscillators

• Daily RSI(14): likely mid-to-high 30s to low 40s after capitulation and bounce; sub-50 = bearish regime. No strong bullish divergence confirmed on daily closes (10/17 low RSI uptick is tentative but price failed at 229).
• 1h RSI: mid-40s and rolling; aligns with weak bounces.
• Stochastics (1h): hovering mid-zone, failing to sustain overbought before rolling → continuation tendency.
• MACD (daily): below zero; histogram contracted during bounce but now flattening → momentum not yet positive. 1h MACD crossing flat/down.

5. Volatility and bands

• ATR(14) daily elevated post-10/10 (est. 20–22), implying typical daily range ~8–10%. Fits a 24h path between ~212–232.
• Bollinger Bands (20,2): price re-entered bands after the 10/10 breach but remains far below the middle band (20D MA). BB width remains wide; regime favors trend-following bounces being sold.

6. Fibonacci retracements

• From 382.93 (8/23) to 206.33 (10/17): range 176.6
  • 23.6%: ~248; 38.2%: ~273.8; 50%: ~294.6; 61.8%: ~315.5. Recent bounce stalled well short of 248 → weak broader retracement.
• From the local swing 262.81 (10/13) → 206.33 (10/17):
  • 38.2%: ~227.9; 50%: ~234.6; 61.8%: ~241.3. The 10/20 high/close action rejected in the 228–235 zone, precisely the 38.2–50% pocket → confirms resistance and favors a new swing lower.

7. Classical pivots (calculated from 10/20 H/L/C: 235.37/218.21/229.06)

• Pivot P = 227.55; R1 = 236.89; S1 = 219.73; R2 = 244.71; S2 = 210.39; R3 = 254.05; S3 = 202.57.
• Current price is hugging S1. Failure to reclaim P (227.55) keeps pressure toward S2 (≈210.4). The closer we hold below 223–224, the greater the odds we test S2 within 24–48h.

8. Ichimoku

• Daily: price below cloud; Tenkan below Kijun; lagging span below price/cloud → full bearish setup. Kijun pullback magnet likely around mid-240s/250s, but with price rejected under 230, mean-reversion remains incomplete and sellers remain in control.

9. Volume and tape read

• Volume peaked during 10/10–10/11 capitulation and again on 10/17 selloff. Subsequent bounce days showed diminishing volume → classic bear rally distribution. OBV would be slanted down; no accumulation signature strong enough yet.
• Today’s intraday volumes modest; bounces were on lighter prints, while down legs showed heavier activity → confirms distribution.

10. Pattern diagnostics

• Descending channel persists; latest lower high carved at ~229.
• No reversal patterns confirmed on daily (no double bottom or inverse H&S yet). 206.3 remains untested after the bounce; the market often retests such pivotal lows.
• Candlesticks: 10/17 could be read as a hammer-ish close, but follow-through failed below major resistance; 10/21 shaping as a bearish continuation day unless reclaimed >223–224.

11. Probabilistic path for next 24 hours

• Base case (60%): Fails near 222–223; drifts to 218.5; breaks toward 216 with an extension to 214–212 if momentum accelerates. Close in 214–218 zone.
• Range case (30%): Holds 219–220 floor; oscillates 219–224, ends near 220–222.
• Bull case (10%): Quick reclaim above 224, squeeze into 227.5–229; stalls beneath 230–235 and fades back.

12. Strategy alignment from multiple tools

• Confluence bearish:
  • Market structure: Lower highs, failed 38.2–50% retrace.
  • MAs: price below 10/20/50D; 5D < 10D.
  • Momentum: RSI sub-50; MACD negative.
  • Pivots: Price at/under S1; below P.
  • Intraday VWAP vicinity ~221: repeated failure above → good short location.
  • Volatility: Elevated ATR favors trend continuation moves once micro support breaks.
• Risk zones:
  • If price spikes into 222.8–223.5 (prior support turned resistance), risk/reward to fade is attractive with nearby invalidation above 226–229 depending on tolerance.
  • Breakdown confirmation below 218.6 opens the 216/214 path quickly.

13. Trade plan (tactical)

• Bias: Sell strength. Use the 222–223 retest band for entry; alternate is momentum short through 218.5 if the bounce fails to materialize.
• Proposed entry (limit): 222.70 (near the breakdown retest/VWAP zone)
• Take-profit (24h objective): 211.80 (near S2 extension/cluster above 210; front-runs liquidity ahead of 210.4 pivot S2)
• Suggested protective stop (not an execution requirement here, but prudent): 226.6 (above 10/21 1h supply and just under 227.5 pivot), yielding approx R:R ≈ 2.8 if filled at 222.7 toward 211.8.
• Optional scaling: Add on rejection wicks at 223.5–224.0; or add on confirmed break below 218.5 with tight stop back above 220.6.

14. What flips the view

• Strong reclaim and 4h close above 229–230 with rising volume would negate the immediate short, opening 234–235 (50% retrace) and potentially 241 (61.8%) in the following sessions. Absent that, rallies are sells.

Bottom line

• The confluence of a dominant downtrend, failed retrace into Fibonacci resistance, price pinned under classic pivots, and distributive intraday tape supports a short-on-bounce approach. Expect 214–216 first, with 212 feasible within the next 24 hours if 218 breaks.