AAVE Price Surges 26% Past $230 Resistance on High Demand

AAVE, a decentralized finance (DeFi) protocol, has recently shown a bullish bias on the 1-day timeframe, with its price surpassing the $230 local resistance level. This upward trend is supported by a bullish market structure, which occurred after a move beyond the lower high from March, situated at $185. The breakout past this level happened earlier this month on high trading volume, indicating a hike in demand that saw the On-Balance Volume (OBV) climb higher. At the time of writing, the highs from March were being challenged on the OBV, suggesting that the rally from the $160 zone was borne by high demand and could go further.

However, the lack of heavy buying pressure on the approach of the $240 resistance zone left room for a retracement. The Fibonacci retracement levels plotted based on the rally in November noted that the retracement in 2025 wiped out all the gains made in the latter months of 2024. On the way up, certain levels, such as $230 and $262, would likely be stiff resistance. At press time, the $230-zone appeared to have been flipped to support, with AAVE bulls battling to surpass this level without success for nearly nine days.

The 3-month liquidation heatmap showed that AAVE was closing in on the liquidity pocket at $246. The proximity of the market price to this liquidation region meant that a move north was likely in the coming days. Whether AAVE can advance beyond $250-$252 would depend on the strength of buying pressure. The 2-week liquidation heatmap highlighted the potential for a range formation, with the magnetic zone at $245-$248 beckoning AAVE higher. However, this level marked the local high of the past four days, suggesting that AAVE could face rejection around the $250-level and retrace towards $210. This scenario appeared unlikely at the time of writing, as the market sentiment was bullish and Bitcoin was being pushed higher, which could spur the altcoin upwards too, and beyond the $250 resistance zone.

Hence, the $262 and $284 levels, along with $250, would be the key resistance levels to watch out for. Traders can keep an eye on the OBV to show sustained buying pressure. Otherwise, it would be an early warning sign. The price of AAVE has been influenced by various factors, including market sentiment, regulatory developments, and technological advancements within the DeFi space. The protocol's innovative features, such as its lending and borrowing platform, have attracted a growing number of users and investors. This increased adoption has contributed to the upward momentum in AAVE's price.

However, the path to $262 is not without challenges. Market volatility and potential regulatory hurdles could pose obstacles to AAVE's price trajectory. Investors are advised to exercise caution and conduct thorough research before making any investment decisions. The cryptocurrency market is known for its unpredictability, and prices can fluctuate rapidly based on a variety of factors. Despite these challenges, the outlook for AAVE remains optimistic. According to analysts' forecasts, the protocol's strong fundamentals and growing user base could drive its price higher in the near term. The DeFi sector continues to evolve, and AAVE is well-positioned to capitalize on this growth. As the market matures, AAVE's price could see further appreciation, potentially reaching new all-time highs.