Is Aave (AAVE) Poised for a Short-to-Midterm Rebound? Decoding the TD Sequential Buy Signal and Key Price Levels

The crypto market is no stranger to volatility, but for Aave (AAVE), a unique confluence of technical and on-chain signals suggests a potential turning point. As the DeFi ecosystem continues to evolve, Aave's position as a cornerstone protocol for decentralized lending and borrowing has drawn renewed attention. With recent developments in technical momentum and on-chain fundamentals, the question now is whether AAVE is primed for a rebound-or if the broader bearish trend will persist.

Technical Momentum: A TD Sequential Buy Signal Emerges

Technical analysis often serves as a roadmap for short-to-midterm price action, and Aave's recent chart patterns are worth dissecting. According to a report by Captain Altcoin, the TD Sequential buy signal has appeared on the 12-hour chart, indicating that selling pressure may be easing after a series of bearish candles. This indicator, which identifies exhaustion in downtrends, suggests that a bounce could be imminent.

The key price levels to monitor are $154 and $146–$150. Breaking above $154 would signal that buyers are regaining control, potentially propelling the price toward $165. Meanwhile, the current consolidation phase near $146–$150-with smaller candles and long wicks-points to reduced panic selling and indecision among traders. If AAVE sustains above $145–$150, it could trigger a short-term recovery toward $200.

However, the broader picture remains bearish. AAVE is still within a descending channel, and a sustained break above $154 would be critical to altering the larger trend. For now, the TD Sequential signal on the weekly timeframe adds further bullish confluence, suggesting that a reversal could be more than just a temporary relief rally. According to Coinpedia analysis, AAVE price is poised for a 2x breakout as on-chain growth hits record levels.

On-Chain Fundamentals: Strength Beneath the Surface

While price action tells one story, on-chain metrics reveal another. Aave's total deposits and weekly revenue have hit record highs, driven by growing institutional interest in its Real-World Asset (RWA) market. These fundamentals suggest that the protocol's utility is expanding, even as the token price lags.

Open interest and trading volume data also paint a mixed but intriguing picture. As of the latest Coinglass report, Aave's open interest stands at $127.5 billion, with AAVE/USD, AAVE/USDT, and AAVE/BUSD being the primary futures contracts. As of the latest report, Aave's open interest has edged up by 0.28%, indicating that leveraged positions remain active.

While 24-hour trading volume dipped by 32.18% recently, the open interest has edged up by 0.28%, indicating that leveraged positions remain active. The decline in trading volume could signal short-term profit-taking or reduced speculative fervor, but the liquidation data tells a different story. Daily liquidations have fallen by 57.73%, suggesting that extreme volatility is abating. This reduction in forced selling could create a more stable environment for a potential rebound.

Convergence of Technical and Fundamental Factors

The interplay between technical signals and on-chain fundamentals is critical. Aave's TD Sequential buy signal aligns with strong deposit growth and institutional adoption, creating a scenario where price action could catch up to fundamentals. If the $154 level holds and buyers push AAVE above $150–$145, the token could see a surge toward $450-a 100% upside from current levels.

However, risks remain. The descending channel and recent volume decline highlight that the bearish trend is not yet broken. Traders must remain cautious, as a failure to hold above $145 could reignite selling pressure.

Final Thoughts: A High-Probability Setup?

Aave's technical and on-chain story is one of cautious optimism. The TD Sequential buy signal, combined with robust deposit growth and institutional interest, creates a compelling case for a short-to-midterm rebound. Yet, the broader market environment and AAVE's position within a descending channel mean that this is not a guaranteed outcome.

For investors, the key is to monitor the $154 and $145–$150 levels closely. A breakout above $154 would validate the bullish case, while a breakdown below $145 could extend the downtrend. In either scenario, Aave's fundamentals suggest that the token's long-term trajectory remains intact, even if the near-term path is bumpy.