Market Overview: Aave/Tether (AAVEUSDT) – 2025-10-11

• Aave/Tether (AAVEUSDT) dropped sharply during early hours, forming a bearish gap, but has since regained some ground.

• The pair found support near $219.5, with a bounce back toward $242.25, suggesting short-term buyers entered the market.

• Volatility and notional turnover spiked during the bearish breakdown and again during the late recovery phase.

• RSI shows overbought and oversold extremes, indicating potential reversal zones and divergences to monitor.

• Bollinger Bands expanded during the breakdown and began to contract as price stabilized, signaling possible consolidation ahead.

Aave/Tether (AAVEUSDT) opened at $265.35 on 2025-10-10 at 12:00 ET, peaked at $267.24, and fell as low as $79.51 before closing at $242.25 at 12:00 ET on 2025-10-11. Total trading volume over the 24-hour period was 686,554.99, with notional turnover reaching approximately $160.39 million. The price action revealed both strong bearish and bullish pressures throughout the session.

Structure & Formations

The price initially formed a bearish breakdown pattern, dropping below a key support level near $219.5. This was followed by a sharp rebound and a bullish engulfing pattern forming around $239.88 to $240.79, suggesting buyers regained control. A key resistance was retested near $242.76 and $244.74 before price consolidated. A bearish doji appeared near $244.17, hinting at possible exhaustion in the upward move.

Moving Averages

On the 15-minute chart, the 20-period and 50-period moving averages crossed bearishly in the early hours, reinforcing the breakdown. However, as price rebounded, the 20-period SMA crossed above the 50-period SMA late in the session, indicating a short-term reversal. On the daily chart, the 50-day moving average at ~$241.00 and the 200-day at ~$235.50 currently serve as dynamic support and resistance, respectively.

MACD & RSI

MACD showed a bearish divergence early in the session, confirming the breakdown. However, the indicator later turned bullish with a histogram expansion during the afternoon recovery. RSI fluctuated between oversold territory (<30) and overbought levels (>70), showing a volatile 24-hour period. The RSI’s divergence from price action at the $219.5 level and again near $243.07 suggests potential reversals.

Bollinger Bands

Bollinger Bands expanded dramatically during the early breakdown phase, reflecting increased volatility. As price stabilized in the afternoon and early evening, the bands began to contract, signaling a potential consolidation phase. The price currently sits near the midline of the bands, with the upper band at ~$246 and the lower at ~$234, suggesting a range-bound setup ahead.

Volume & Turnover

Notable volume spikes occurred during the breakdown (21:00–22:00 ET) and the late recovery phase (02:00–04:00 ET). The volume during the rebound, particularly in the $230–240 range, was significant and supported the move higher. However, the volume has since declined, indicating possible waning momentum. Turnover also mirrored these trends, with divergences noted around $219.5 and $244.17, suggesting cautious positioning from traders.

Fibonacci Retracements

Fibonacci levels drawn from the $79.51 low to the $280.0 high show key retracement levels at $241.5 (61.8%) and $256.5 (38.2%). Price is currently hovering near the 61.8% retracement, which could either act as support or trigger a breakout to the upside if buyers step in. On the 15-minute chart, retracements drawn from the $223.7 to $233.94 swing suggest that the 61.8% level (~$230.70) is now a key pivot.

Backtest Hypothesis

The backtesting strategy involves entering long positions when price closes above the 50-period EMA with RSI above 50 and a bullish engulfing pattern confirmed. Short positions are triggered when price closes below the 50-period EMA with RSI below 50 and a bearish doji or breakdown pattern. Given the recent bounce off $219.5 and the bullish engulfing pattern around $239.88 to $240.79, the strategy would have generated a long signal late in the session. A close above $244.74 with RSI above 50 could validate further long entries, while a retest of the $230.70 Fibonacci level may offer a short entry if a bearish reversal forms.