AAVE Breakdown Confirmation: Sell-the-Retest Setup After High-Volume Capitulation

Market snapshot (AAVE)

• Current price: $147.40
• Last daily candle (2026-01-29, partial but includes full swing): O ~159.98 / H ~159.98 / L ~143.27 / C 147.40 on very high volume (~460M).
• Context: AAVE has been in a multi-month downtrend from ~$228 (early Nov) to ~$147 now, with lower highs/lower lows and repeated failed rebounds.

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1) Multi-timeframe trend & structure

Daily structure (swing trend)

• From 2026-01-13 close ~177.15 to 2026-01-29 close 147.40: clear sequence of lower highs (179→178.6→176.2→169.1→164.1→163.5) and lower lows (153.07→145.73→143.27 intraday).
• The drop on 1/29 broke down from the 155–160 consolidation seen 1/23–1/28.
• Implication: trend remains bearish, and the latest move looks like a distribution → breakdown rather than a healthy pullback.

Hourly structure (intraday momentum)

• 1/29 14:00–18:00 shows an impulse selloff: ~154 → 143.34 (sharp range expansion).
• 19:00–21:00 shows a dead-cat bounce: ~143 → 147.4, but it did not reclaim the breakdown shelf around ~151–154.
• Implication: bounce is corrective unless price reclaims key resistance zones.

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2) Key support/resistance mapping (price action / market profile style)

Near-term supports

• $143.3–$145.0: intraday capitulation low zone (1/29 hourly low ~143.33). First support; if it fails, sellers likely press again.
• $146.0–$147.0: minor support/flip area (late-day bounce base). Weak because it formed after a large breakdown.

Resistances (sell-the-rip zones)

• $151.0–$154.0: breakdown region (hourly 14:00 low prints ~151, then free-fall). Common retest target.
• $156.5–$160.0: prior range/upper distribution and intraday supply; also where the day started (~160).
• $164–$167: prior swing area (1/21–1/23), now higher timeframe resistance.

Conclusion from S/R: The market is below major supply; rallies into 151–154 are likely to meet selling pressure.

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3) Volatility & range expansion (ATR / impulse behavior)

• The latest daily move spans roughly $16.7 (159.98 → 143.27), a large expansion relative to the preceding days.
• Large range + very high volume typically indicates either:
  1. Capitulation / selling climax (potential short-term bottom), or
  2. Breakdown acceptance (trend continuation after a brief bounce)
• Given the broader downtrend and failure to reclaim 151–154 quickly, this currently leans toward breakdown acceptance with elevated volatility, meaning two-sided swings are possible but bias remains bearish.

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4) Volume & “effort vs result” (Wyckoff lens)

• Volume is extremely high on the breakdown day. Price closed far below the open and well below the breakdown shelf.
• The late bounce did not negate the selling; it looks like short-covering / bargain bids, not strong accumulation yet.
• Wyckoff read: likely markdown continuation unless we see a successful retest (low volume on retest + strong reclaim of 154/160). That reclaim is absent.

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5) Candlestick / pattern read

• Daily candle resembles a large bearish expansion with a lower close (bearish control). It does have a lower wick (down to 143), but the close at 147 is still weak versus the breakdown level.
• Pattern hypothesis:
  • Bear flag / breakdown-retest setup likely: breakdown from 155–160, bounce toward 151–154, then potential continuation lower.

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6) Momentum indicators (inferred from price sequence)

(Exact RSI/MACD values can’t be computed perfectly here without running calculations, but the price path strongly suggests the following states.)

RSI-style momentum

• Multiple weeks of lower highs/lows + sharp sell day implies RSI likely oversold or near-oversold.
• Oversold in a downtrend often means bounces happen, but they are often sellable until structure flips (higher high above resistance).

MACD-style trend

• The mid-January roll-over from ~177 to ~153 and now to ~147 implies negative momentum regime (MACD below signal / below zero likely), consistent with trend continuation risk.

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7) Fibonacci confluence (swing-based)

Using recent visible swing zones:

• Swing high area: ~179–180 (1/14–1/16 zone)
• Swing low area: ~145.7 (1/25 low) and now 143.3 (1/29) Typical retracement resistance levels align roughly with:
• 0.382–0.5 retracement landing around mid/upper 150s (≈155–162 region), matching prior range supply.
• Implication: even if a bounce develops, the most probable “mean reversion cap” is 151–160.

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8) 24-hour forward scenario (probabilistic)

Given:

• Strong downtrend backdrop
• Fresh breakdown below 155–160
• High-volatility impulse followed by modest bounce

Base case (higher probability): Bearish continuation after a retest

• Path: price attempts a retest into 151–154, gets rejected, then drifts/impulses back to 145, possibly re-tagging 143–144.
• Expected 24h range: roughly $142–$154.

Alternate case: Capitulation low holds and stronger squeeze occurs

• If $143–$145 holds firmly and buyers reclaim $154 (and especially $160), we could see a squeeze toward $156–$163.
• This requires clear acceptance back above breakdown levels; currently not confirmed.

Net bias next 24h: Down / choppy, with rallies likely sold.

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Trade decision (spot/derivatives style)

Signal synthesis

• Trend: Bearish (daily lower highs/lows)
• Structure: Breakdown from 155–160
• Volume: Distribution/acceptance more than clean accumulation
• Near-term: Likely retest then continuation

Decision: Sell (Short Position)

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Execution plan (optimal open/close based on levels)

Optimal open (short entry)

• Prefer not to short the hole at 147 after an impulse.
• Best risk/reward entry: on a rebound into former support (now resistance):
  • Open Price: $152.20 (inside the 151–154 sell zone; aims for retest rejection)

Take-profit / close

• First meaningful liquidity is the breakdown low region:
  • Close Price (TP): $144.20 (above 143.3 low to improve fill probability)

(If price fails to bounce to the open price and instead breaks below ~145, the “optimal” entry is missed; chasing at 146–147 worsens R:R.)

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Note: This is technical-analysis-based and ignores sudden news risk; crypto can gap sharply.