AAVE (AAVE) is displaying a bullish trend, with recent price movements suggesting potential for further gains. Having surpassed the $230 resistance level, the altcoin now faces crucial levels in its journey to higher price zones. However, market sentiment remains mixed, and AAVE’s ability to break past key resistance levels will largely depend on buying pressure and broader market conditions.

Bullish Sentiment on the 1-Day Chart

AAVE’s price action on the 1-day chart paints a promising picture for bulls. The altcoin’s uptrend followed a breakout past the local resistance at $185 earlier this month, driven by high trading volumes. This breakout, in particular, flipped the market structure to a bullish one, marking a clear shift from lower highs to higher highs. With the On-Balance Volume (OBV) indicator climbing to challenge the highs of March, AAVE’s price rally from the $160 zone seems to be fueled by strong demand, signaling potential for further upward movement.

The Fibonacci retracement levels, plotted from AAVE’s November rally, suggest that the altcoin may face resistance as it approaches key price levels. Specifically, the $230 and $262 levels are likely to be important barriers, with the market currently focusing on whether AAVE can break through these zones.

Resistance Levels to Watch

At press time, the $230 level, previously acting as resistance, has now been flipped to support. This represents a significant victory for bulls, as they had struggled for nearly nine days to break through this level. The ability to maintain support at this level will be crucial for AAVE’s continued upward momentum.

However, AAVE’s journey isn’t free from obstacles. The next major resistance is near the $250 level, which has shown to be a tough point for the asset in recent days. The proximity to a liquidation pocket around the $246 mark, as indicated by the 3-month liquidation heatmap, suggests that a move toward this level is possible in the short term. Whether AAVE can break above the $250-$252 range will depend on sustained buying pressure.

Potential Range Formation

The 2-week liquidation heatmap highlights the possibility of AAVE forming a price range between $245 and $248, with a potential rejection at the $250 level. If the asset faces resistance around $250, it could retrace toward the $210 level. However, this scenario seems unlikely given the overall bullish market sentiment, with Bitcoin (BTC) also pushing higher and positively influencing the altcoin market.

In this case, a more optimistic outlook suggests that AAVE could continue its upward movement, potentially reaching key resistance zones at $262 and $284. These levels are the next significant price hurdles to watch for as the market plays out in the coming days.

Key Resistance and Support Levels to Monitor

As AAVE pushes higher, traders should closely monitor its price action at the $230 support zone, as a failure to hold this level could signal a potential reversal. The $250 and $262 resistance levels are likely to be the next major hurdles, and breaking through these zones would open the door for AAVE to reach even higher price targets, potentially approaching the $284 level.

On the downside, if AAVE fails to maintain support above the $230 region, a retracement toward the $210 area could become likely. However, the strong demand evidenced by the OBV indicator and positive market sentiment suggests that AAVE is well-positioned to challenge these resistance levels.

Conclusion: AAVE’s Short-Term Outlook

In summary, AAVE is currently positioned in a bullish market structure, with the potential to break through key resistance levels around $250 and $262. The market sentiment is strongly influenced by Bitcoin’s upward momentum, and should this trend continue, AAVE could see further upward movement. However, traders should remain cautious of the $250 resistance zone, as a rejection here could trigger a short-term retracement. Keeping an eye on the OBV and liquidity levels will be essential in gauging whether AAVE can maintain its bullish bias and continue its climb toward higher price targets.