Trading at $136, AAVE has extended its weekly gains by 37%, with analysts eyeing a potential climb to $154. This significant move follows a breakout from a key technical pattern, signaling promising prospects for the token. Here’s a detailed look at the factors driving AAVE’s surge and what might come next.

Breakout from Bullish Pattern

Aave has recently broken above the neckline of a double bottom pattern, a classic bullish reversal formation. This pattern typically signals a potential upward trend after a period of consolidation and is often viewed as a strong indicator of further gains. The double bottom formation seen in AAVE’s price charts suggests that the token is poised for a rally, potentially targeting the $154 mark.

The double bottom pattern occurs after a downtrend and features two distinct lows at roughly the same price level, separated by a peak. Once the price breaks above the peak formed between these two lows, it typically signals the start of a new uptrend. AAVE’s recent breakout above this neckline has set the stage for a potential rally to $154, a level that represents a two-year high for the token.

Technical Indicators Signal Further Gains

Several technical indicators are reinforcing the bullish sentiment surrounding AAVE. The Relative Strength Index (RSI), currently at 74, highlights strong buying activity. While the RSI is approaching overbought territory, historical data shows that AAVE’s RSI has reached even higher levels during previous rallies. For example, the RSI peaked at 86 during past uptrends before short-term profit-taking occurred.

Additionally, the Moving Average Convergence Divergence (MACD) is showing bullish signs. The MACD line has crossed above the signal line, and the MACD histogram bars have been growing longer since August 15. This growth reflects increasing bullish momentum and suggests that the rally could continue as long as buying activity remains strong.

Increased Market Activity

AAVE’s recent performance is also supported by rising market activity. The token’s daily trading volume has increased by 20% in the last 24 hours, with notable whale activity driving significant buy orders. According to recent data, whales have accumulated over $8 million worth of AAVE, signaling robust investor interest.

Moreover, data from Santiment reveals that the number of daily active AAVE addresses has reached its highest level since July 2023. This increase in active addresses indicates growing engagement with the token and suggests that market interest is on the rise.

Open Interest Soars

Another bullish signal for AAVE comes from the Open Interest (OI) data. According to Coinglass, AAVE’s OI has surged from $93 million to $191 million since August 1. This increase in OI reflects heightened interest in AAVE derivatives, further supporting the notion of a strong bullish trend.

Market Sentiment and Future Outlook

Despite the positive indicators, the broader market sentiment remains crucial. AAVE’s rally has occurred amid increasing market volatility and changing macroeconomic conditions. For instance, recent market developments, such as fluctuations in global liquidity and investor sentiment, can impact the sustainability of the current uptrend.

Looking ahead, if AAVE can maintain its momentum and overcome the resistance at $154, the token could see further gains. However, traders should be cautious of potential market corrections and remain vigilant of any signs of overextension.

Conclusion

Aave’s recent breakout from the double bottom pattern and the accompanying technical indicators suggest a strong bullish trend. With a target price of $154 on the horizon, AAVE appears well-positioned for further gains. The increased market activity, rising daily active addresses, and growing Open Interest all support the positive outlook for the token.