AAVE’s recent price action shows a strong bullish momentum, and according to Elliott Wave analysis, the altcoin is poised for further gains. Currently, AAVE is in Wave III of an impulsive five-wave structure, signaling that the upward movement will continue in the short term. Analysts predict that AAVE could test the $492 level as part of its next major move, and the current technical indicators support this bullish outlook.

Elliott Wave Overview: What’s Happening with AAVE?

Elliott Wave theory suggests that markets move in predictable cycles of five waves during an uptrend. AAVE is currently in the third wave, also known as Wave III, which is typically the longest and strongest part of the upward movement. This wave follows the correction seen in Wave II, which has now seemingly concluded. As a result, the market is set for the next leg up, expected to take AAVE to higher price levels.

Wave III is an important phase in any Elliott Wave cycle, often characterized by sharp, sustained price movements. As part of the impulsive structure, this wave should lead to more substantial price gains. Based on current projections, AAVE could potentially reach the $492 level as the market moves through Wave III. If the altcoin successfully follows this pattern, this could represent a major profit opportunity for investors and traders.

Key Support and Resistance Levels

While the bullish outlook for AAVE is strong, traders must remain mindful of critical support and resistance levels that could influence the direction of the trend. According to the Elliott Wave analysis, the invalidation level for this bullish scenario is $125.280. Should the price fall below this level, it would indicate a breakdown in the bullish structure and signal a potential trend reversal. However, as long as AAVE holds above this support level, the rally remains intact.

On the upside, the immediate target is $492. This level is the next key resistance point for AAVE as it progresses through Wave III. Should the price surpass this level, it would open up further upside potential, with the next targets possibly even higher, depending on the strength of the rally.

Technical Indicators Align with the Bullish Trend

The technical indicators currently support the bullish outlook for AAVE. The cryptocurrency remains firmly above its 200-day moving average (MA200), which is a strong indication of a sustained uptrend. The MA200 is a widely followed indicator, and staying above it suggests that the long-term trend remains bullish.

Additionally, the Wave Oscillator is showing bullish momentum, confirming that buying pressure is driving the price action. This aligns with the ongoing five-wave structure of Wave III, further validating the current bullish sentiment.

Trading Strategy: Re-Entering the Trend

For traders looking to capitalize on this bullish movement, now may be an ideal time to consider entering or re-entering the market. With Wave II’s correction seemingly over, the focus should shift to Wave III’s rally. As the price continues to rise, traders can monitor key levels for re-entry points to ride the trend upwards. Given the strong technical setup, AAVE presents an attractive opportunity for traders willing to manage their risk and monitor for signs of further price action.

Conclusion

AAVE/USD is currently in a strong bullish trend according to Elliott Wave analysis. With the price above the key 200-day moving average and technical indicators suggesting continued upward momentum, the altcoin is set to test higher levels, including the $492 mark. While the invalidation level is $125.280, as long as AAVE stays above this level, the bullish outlook remains intact. Traders looking to take advantage of this uptrend should keep an eye on these critical levels and adjust their positions accordingly.