AAVE has recently demonstrated notable bullish momentum, gaining 5.2% in the past week and 1.12% in the last 24 hours. Trading at $250.83 at press time, the cryptocurrency has been showing signs of stabilization, with key levels of support and resistance indicating the potential for further upward movement. However, despite these positive trends, market sentiment remains cautious, and traders are closely monitoring economic data that could influence AAVE’s next move.

Bullish Trends and Key Levels

AAVE’s moving averages are signaling an optimistic short-term outlook. The 9-period moving average at $245.64 and the 21-period moving average at $243.10 are in a bullish crossover, with AAVE currently trading above both. This indicates short-term upward momentum for the cryptocurrency.

However, resistance is expected to emerge around the $252–$256 range, with the next key resistance level sitting at $260. On the downside, support is seen between $243.50 and $245.00. This range is crucial for AAVE to maintain its bullish trend, as a drop below this level could signal a reversal or consolidation.

In addition to moving averages, the Relative Strength Index (RSI) is showing a neutral bias at 52.95. This indicates that AAVE is neither overbought nor oversold, leaving room for potential price movement in either direction. Meanwhile, the MACD indicator also reflects a mild bullish sentiment, as the MACD line (2.14) has crossed above the signal line (-3.10), although it remains below the zero line.

Open Interest Decline and Positive Volume Growth

Despite the bullish signals from technical indicators, market activity is moderating. AAVE’s Open Interest (OI), which measures the number of active derivative contracts, has decreased by 2.21%, reaching $213.97 million. This decline suggests a slight reduction in market participation, though the overall sentiment remains cautiously optimistic.

On the other hand, AAVE’s trading volume has surged by 29.42%, reaching $499.94 million in the past 24 hours. This increase in volume points to growing interest in spot markets, suggesting that investors are becoming more active in the current price range. Historical data from Coinglass shows a surge in OI between October and December, peaking near $500 million. Since then, a gradual decline has been observed, correlating with AAVE’s price stabilization between $214 and $271.

Reduced Large Transactions and Cautious Sentiment

One noteworthy development is the decline in large transactions (≥$100,000), which has dropped significantly. In the past 24 hours, only 159 such transactions were recorded, a stark contrast to the 1,070 transactions observed on February 3. The decline in high-value activity reflects reduced investor confidence compared to December when AAVE’s price was near $385.

Sentiment analysis from IntoTheBlock shows a slightly bearish tilt in the market, with 137 bulls and 142 bears over the past week. Historically, sentiment around AAVE has been relatively balanced, with neither bulls nor bears holding a clear majority. This suggests that traders are awaiting further price developments and macroeconomic data, such as the upcoming release of the Consumer Price Index (CPI) and Producer Price Index (PPI), which could significantly impact market sentiment.

Conclusion

AAVE’s recent performance has been positive, with bullish trends emerging on key technical indicators. However, the market sentiment remains cautious as traders closely watch support and resistance levels, as well as upcoming economic data. With growing interest in spot markets and a slight decrease in large transactions, AAVE’s next move may depend on broader market conditions and external factors. While the cryptocurrency shows promise, traders are urged to stay alert and prepared for potential volatility in the coming weeks.