Market Overview for Aave/Tether (AAVEUSDT) - 2025-10-04

• Aave/Tether (AAVEUSDT) declined by 2.9% over 24 hours amid mixed momentum and diverging volume patterns.
• Price broke below key support near $289.5, suggesting bearish continuation with a short-term bottom near $281.
• Volatility expanded during the early morning, with a surge in turnover as the price accelerated toward the 61.8% Fibonacci level.
• RSI entered oversold territory, hinting at potential short-term buying interest, though MACD showed bearish divergence.
• Bollinger Bands narrowed into the early session before a sharp break below the lower band, signaling increased bearish pressure.

On 2025-10-04 at 12:00 ET, Aave/Tether (AAVEUSDT) opened at $291.41, reached a high of $302.19, and closed at $282.47 after hitting a 24-hour low of $279.91. Total volume for the pair was 148,958.897 units, with a notional turnover of $42,000,464. The price action displayed bearish momentum, with a breakdown from key support levels and a sharp sell-off during the overnight hours.

Structure & Formations

Price action showed a key breakdown below the $291.50 level, with a bearish engulfing pattern forming around 16:30 ET on 2025-10-03. This was followed by a rapid descent into the $284–$286 range, where a series of bearish harami patterns confirmed continuation. A critical support zone was identified between $284.98 and $286.1, which was broken with heavy volume. A key Fibonacci level at 61.8% ($283.7) was reached in the overnight session, with further support likely forming around $281.50–$282.34.

Moving Averages

On the 15-minute chart, the 20-period and 50-period moving averages were both in a bearish crossover by 19:00 ET. The 50-period line sat above the price, reinforcing the bearish trend. On the daily chart, the 50-period MA was above the 200-period MA, maintaining a bearish bias. The price closed below all three major moving averages (50, 100, and 200), signaling a continuation of the downtrend unless a strong reversal occurs.

MACD & RSI

MACD was negative throughout the session, with a bearish crossover occurring before the sharp price drop. The histogram showed a rapid expansion in bearish momentum during the overnight hours. RSI fell into oversold territory below 30, suggesting potential short-term buying interest, but the divergence between RSI and price action indicated that the move down might not be complete.

Bollinger Bands

Volatility expanded significantly during the overnight hours, with the bands widening from a narrow consolidation phase. The price closed the session below the lower Bollinger band, reinforcing the bearish bias. The narrowing of the bands earlier in the session suggested a period of consolidation, followed by a sharp bearish break. The current position below the lower band indicates increased short-term selling pressure.

Volume & Turnover

Volume spiked during the late-night hours, confirming the breakdown from key support levels. Notional turnover also surged during this period, aligning with the sharp price move. However, the final 15-minute candles showed relatively modest volume, indicating a possible lack of follow-through in the bearish move. This could either signal exhaustion or a lack of conviction in further downside.

Fibonacci Retracements

The recent bearish move from $302.19 to $281.56 aligned with the 61.8% Fibonacci retracement level at $283.7. This level acted as a temporary floor before the price broke below it. On the daily chart, the 50% Fibonacci level from the previous major swing appears near $275–$277, which could become a critical area in the next 48–72 hours.

Backtest Hypothesis

Given the bearish breakdown from key support levels and the confirmation from both volume and momentum indicators, a potential backtest strategy could involve a short entry on a close below the $283.7 Fibonacci level, with a stop above the $286.98–$287.05 range. A target for the short could be the next 61.8% level or the 78.6% level at $276.6–$278.5. This strategy would aim to capture a continuation move while managing risk with a tight stop. A trailing stop could be added after a 10–15% move in the desired direction.