AAVE

Prediction

BEARISH

Target

$151.2

Estimated

Model

trdz-T52k

Date

2026-01-20

22:00

Analyzed

Aave Price Analysis Powered by AI

AAVE Breakdown After Support Failure: Sell the Relief Bounce Toward $158–$160

Market snapshot (AAVE)

Current price: $154.21
Context (daily): Clear downtrend from the Oct peak ~ $248 to the recent Jan low ~ $153.94.
Most recent daily candle (2026-01-20): O $163.83 / H $164.12 / L $153.94 / C $154.21 → large bearish expansion candle (~-5.9%) with a deep lower wick and heavy volume versus recent days.
Intraday (hourly 2026-01-20): steady distribution from ~163.5 → 159 → 157 → 155 → 154; only a mild bounce attempt near 154.7–155.5 before fading back to ~154.2.

1) Trend & structure (Dow Theory / market structure)

Higher timeframe (daily)

Sequence since mid-Jan: 179 → 178 → 171 → 175 → 173 → 169 → 163.8 → 154.2.
This is a textbook pattern of lower highs and lower lows, confirming bearish structure.
The market is now trading below prior support zones (notably the ~160–162 area that held repeatedly in late Dec/early Jan).

Implication: Primary trend remains down, so probabilities favor either (a) continuation lower or (b) a short-lived mean-reversion bounce that struggles at broken support.

Intraday structure (hourly)

Clean step-down with only shallow pullbacks → indicates seller control and weak dip-buying.
The late-session bounce to ~155.49 failed quickly → suggests overhead supply already active.

Implication: Any bounce is likely to be sold into near first resistance bands.

2) Support/Resistance mapping (horizontal levels + role reversal)

Key supports

$153.9–154.2: immediate support (today’s low + current price region). A break would likely trigger stops.
$150.3–151.0: major daily pivot zone (multiple closes around 150–154 in late Dec). Next logical downside magnet.
Below that, psychological/structure: $145–146 (late Dec / Dec 31 area).

Key resistances

$156.2–157.6: intraday supply zone (multiple hour candles + breakdown region).
$159.5–160.0: strong “role reversal” area (formerly intraday support earlier today; now resistance).
$163.8–164.1: today’s open/high; major overhead level for 24h horizon.

Implication: With price below 160, rallies into 156–160 are statistically better short entries than chasing near 154 support.

3) Candlestick / price action signals

Daily candle on 01-20 is a bearish impulse (wide range, strong close in the lower part of the range).
There is a lower wick, which signals some demand below 154; however, the close near 154 shows that demand was not strong enough to reclaim key levels.

Interpretation: This resembles a capitulation/flush day within a downtrend. Typically followed by either:

a dead-cat bounce (mean reversion) that fails at resistance, or
a brief base then another leg down.

Given intraday weakness and failure to hold 155+, scenario (1) is more likely within 24h.

4) Momentum (RSI-style inference) + rate of change

While exact RSI isn’t computed here, the recent sequence features:

Multiple consecutive down days (169 → 163.8 → 154.2)
Large negative daily return today

This strongly implies oversold momentum on shorter lookbacks, but not a trend reversal signal by itself.

Implication: Oversold conditions increase the chance of a bounce, but the dominant edge is still: sell rallies until structure changes.

5) Moving averages (behavioral/mean reversion framework)

From the dataset, price has been falling from the 170s into the mid-150s rapidly.

Short-term averages (5–10 day) are likely rolling over.
Medium-term averages (20–50 day) are likely above spot price given Dec/early Jan trade mostly 165–200.

Implication: Price is likely below key moving averages, meaning rallies are more likely to encounter systematic selling (trend-followers / MA reversion sellers).

6) Volatility & range analysis (ATR concept)

Today’s daily range: ~$10.18 (164.12 - 153.94), which is large relative to many recent daily candles.
High volume accompanies the large range → volatility regime expansion.

Implication (24h): Expect continued elevated intraday swings. Even if direction is down, there may be sharp countertrend spikes.

7) Volume & "effort vs result" (Wyckoff lens)

Heavy selling volume appeared during the breakdown days (notably 01-13 surge earlier, and today’s strong volume).
Today: large effort (volume) produced a decisive markdown.

Possible Wyckoff interpretation:

Not enough evidence of accumulation (no sustained reclaim of broken levels).
More consistent with markdown continuation with occasional short-covering rallies.

Implication: Favor short bias, but avoid selling directly into support (154 area) where short-covering can whip.

8) Pattern read (breakdown from a shelf)

Late Dec to mid-Jan broadly formed a distribution shelf around 165–175, followed by breakdown:

169 → 163.8 → 154 indicates a break-and-accelerate move.

Measured move (rough heuristic):

Shelf height roughly 175 down to 165 = 10.
Breakdown from ~165 suggests target ~155 (already hit) and potentially extension toward next pivot ~150.

Implication: With $155 reached, the next attractor is $150–151 if selling persists.

24-hour forecast (probabilistic)

Base case (higher probability):

Choppy consolidation-to-down with a relief bounce that stalls below 160.
Likely path: attempt bounce into $156.5–$159.5, then renewed selling back toward $153–$151.

Bear continuation case:

If $153.9 breaks cleanly, acceleration toward $151 → $150.5 is likely.

Bull relief case (lower probability):

Reclaim and hold above $160, then squeeze toward $163–164. This would require a clear intraday reversal structure that is not yet present.

Net: downside skew remains, but expect bounce attempts due to oversold conditions.

Trade plan (24h)

Bias: Sell (short) the bounce

Selling at $154 is suboptimal (too close to support; poor R:R due to bounce risk).
Optimal is to let price retrace into resistance.

Entry (Open Price): $158.60

Rationale: within the 156.2–160 resistance band; closer to the stronger role-reversal zone while still realistic within 24h volatility.

Take profit (Close Price): $151.20

Rationale: sits just above the major $150.3–151 support cluster (late Dec pivot), improving fill probability before a bounce.

(Operational note: if price fails to bounce to 158.6 and instead breaks below 153.9 with momentum, the market is already moving toward the target—entry would need to be revised rather than chased.)