AAVE: Sell the Bounce into 233–235 — Target 222 in the Next 24 Hours

Disclaimer: This is educational market analysis, not financial advice. Crypto assets are highly volatile. Manage risk and use stops.

Market overview and regime

• Context: AAVE experienced a regime change on 2025-10-10 with an extreme intraday crash (low near 109.7) and a capitulation-style volume spike, then re-established a new value area between roughly 216–241 over the past two weeks. Price is now 227.07, retracing from a recent attempt to break above 240–248 on 10/26–10/27.
• Current bias: Short-term bearish momentum within a larger post-capitulation range. The market is distributing below a 234–236 supply shelf that just failed intraday.

Multi-timeframe price action

• Daily (swing):
  • Trend: Lower highs since late August (383 on 8/23) and a pronounced downtrend from mid-September (~320–345) to early October (~270–300), followed by a sharp washout on 10/10 and a range-building phase 206–241. The 10/27 candle is a bearish wide-range bar closing near the low, engulfing much of 10/26’s advance; today extends lower.
  • Structure: Post-crash balance with value centered around 226–235. Attempts to build above 240 failed; the 240–248 area is now confirmed resistance/supply.
  • Key daily levels: 206.3 (10/17 pivot low), 214.9, 216.8–218.8 (confluence of closes 10/21–10/22), 222.5 (10/19 close), 224.5 (10/23 close), 226–229 (recent POC region), 234–236 (broken support turned resistance), 240.7–241.7 (10/26 high), 248.1 (10/27 intraday high).
• Intraday (hourly 10/27–10/28):
  • Persistent series of lower highs/lows with a clean breakdown from 234–236. The 20:00 UTC hour shows a decisive momentum candle from ~230.7 to ~227 with above-average volume, closing on lows—classic continuation behavior.
  • Micro-structure: A descending triangle formed around 235 base through the EU/US overlap, then broke down. Price accepted below 231 and now tests 226.8–227.

Volume and order-flow context

• Capitulation signature: 10/10 and 10/11 registered the largest two-day volume in the period (capitulation + reactive buying). Since then, volume has normalized but remains responsive around inflection zones.
• Recent distribution: 10/27’s selloff occurred on rising volume, and the 10/28 20:00 UTC breakdown bar expanded volume again—bearish confirmation.
• VWAP (session): Price traded below session VWAP throughout the US afternoon, with pullbacks capped near 234–236 earlier—bearish intraday control by sellers.
• Market profile: Point of control for the recent 1–2 day distribution sits roughly 234–235; losing that node suggests migration of value lower toward the 226–229 node and potentially the 222–224 node next.

Trend and moving averages

• 9-day SMA ≈ 227.5 (est.): Price is fractionally below, indicating no near-term mean-reversion tailwind yet.
• 20-day SMA ≈ 233.0 (est.): Price below the 20SMA; that 232–235 zone aligns with broken support and is likely to act as supply on bounces.
• 50-day SMA (est., rough): Well above price (high 270s–290s), confirming medium-term downtrend.
• Hourly EMAs (5/20): Bearishly stacked and fanning out; pullbacks have been sold.

Momentum and oscillators

• RSI(14) daily (est.): Neutral-bearish in the low-to-mid 40s after the 10/26–10/27 failure, leaving room to the downside before daily oversold.
• RSI hourly: Likely sub-30 on the 20:00 breakdown, supporting a tactical bounce risk, but momentum structure favors selling rallies rather than bottom-fishing.
• MACD daily: Below signal with a negative histogram expanding since 10/27, consistent with fresh downside momentum.

Volatility and ranges

• ATR(14) daily (est.): Approximately 12–15 given recent ranges. A 24-hour expected move from 227 implies a typical band of roughly 214–240.
• Bollinger Bands (20,2): Mid-band near 233; price pressed under the mid-line and heading toward the lower band. Not yet at an extreme, implying room for continuation lower before a strong mean reversion.

Ichimoku (daily, approximations)

• Tenkan (9-period mid) ≈ low 230s; Kijun (26-period mid) ≈ 253–254 (highest high ~301 vs lowest low ~206 in lookback). Price below Tenkan and Kijun, and below the cloud—bearish regime. Chikou likely below price and cloud, endorsing downside bias.

Pattern diagnostics

• Bearish engulfing/upper rejection: 10/26 bullish day followed by 10/27 large bearish candle that rejected the 240s and closed near lows—classic failed breakout and swing reversal.
• Descending triangle and base break: Multi-hour base around 235 broke decisively; broken base often becomes resistance on retests (supply flip).
• Post-capitulation range: We are traversing from the top of the 216–241 range back toward mid-to-lower range (222–224, then 218–219) where responsive buyers previously emerged.

Fibonacci context

• Micro swing (10/26 high 240.7 to 10/28 low ~226.8):
  • 38.2% retrace ≈ 232.3
  • 50% ≈ 233.8
  • 61.8% ≈ 235.3 These align with the 234–236 resistance shelf—ideal for a fade setup.
• Larger swing (10/10 low 109.7 to 10/27 intraday high 248.1): Price is only ~8% off the swing high, far above 38.2% retrace (~195). This suggests the 109 wick is likely an extreme tail; practical range is the 206–248 post-crash acceptance. Within this, the current action is a rotation lower toward the range midpoint.

Elliott wave (tactical interpretation)

• From 10/26 local high: Potential wave 1 down into 231, wave 2 corrective bounce failed at ~236, now wave 3 extension initiating toward 222–219, later a wave 4 pause (back to ~222–224) and a final wave 5 push possibly probing 216–218. This is a micro-count consistent with momentum breadth.

Support and resistance map (confluence-driven)

• Resistance/supply: 232.3–235.5 (Fib 38.2–61.8 + 20SMA + broken base), 240.7–241.7 (failed breakout zone), 248.1 (swing high).
• Support/demand: 226.8–227.1 (current pivot), 224.5 (10/23 close), 222.4–222.5 (10/19 close), 218.8–216.8 (10/21–10/22 closes), 214.9, 206.3 (major shelf from 10/17).

Catalyst and correlation considerations

• No explicit catalysts in the dataset; typical crypto beta suggests AAVE follows broader risk conditions and BTC/ETH direction. Recent risk-off intraday tone supports a cautious stance.

Scenario analysis (next 24 hours)

• Base case (60%): Weak bounce into 232–235 supply, sellers reassert, push to 222–224. Closing in the 223–226 band.
• Bearish extension (25%): Only shallow bounce (230–232) then continuation to 218–219, brief consolidation; possible spike into 216–218 if liquidity thins.
• Bullish invalidation (15%): Strong reclaim of 236 and acceptance above 237–238 (hourly close and hold), squeeze toward 240–242; would neutralize the short setup.

Trade plan (tactical short, sell-the-bounce)

• Rationale: Confluence of resistance at 232–235 (Fib cluster, 20SMA, broken base), negative momentum (MACD), price below VWAP and key MAs, and hourly structure of lower highs. Favor risk-defined short on a bounce rather than chasing lows to improve reward-to-risk and avoid oversold whipsaws.
• Entry: Place limit to Sell near 233.5 (within the 50% Fib of the 240.7→226.8 downswing and near the 20SMA/POC flip). If momentum is strong, allow fills 232.5–235.0; preferred is 233.5.
• Take-profit (primary): 222.5 (confluence of prior daily close support and projected wave-3/5 targets). This captures the likely 24h rotation.
• Stop-loss (discipline, not an execution instruction here): 237.6 (above 61.8% retrace and above recent intraday lower-high cluster), keeping a ~4.1 risk vs ~11.0 reward (R:R ≈ 2.7:1).
• Add-on/extension (secondary, optional beyond 24h): If 222.5 breaks with momentum, trail toward 218.8–216.8. Conversely, if price fails to bounce to entry, consider a tactical sell-stop only on a clean breakdown through 226.5 with immediate momentum confirmation.

What would change my view

• A sustained reclaim and acceptance above 236–238 with rising volume and an hourly close >238 would negate the short bias and shift expectations to a retest of 240–242; above 242 opens 248.

24-hour price path expectation

• Early: Dead-cat bounce attempt toward 232–234 as shorts cover and dip buyers try their luck.
• Mid-session: Sellers fade the bounce from 233–235; momentum resumes lower.
• Late: Test 224–222 support; intraday stabilization likely around 222–224 if no new catalyst; tail risk of a liquidity sweep into 219–217 before rebounding.

Bottom line

• The weight of evidence (broken 235 base, bearish momentum, resistance confluence at 232–235, and distributional volume) favors selling bounces. Optimal setup is a short near 233.5 targeting 222.5 within the next 24 hours, with invalidation above 237.6.