Aave [AAVE], a leading decentralized finance (DeFi) protocol token, broke past the critical $280 resistance level earlier this week, defying bearish predictions and igniting bullish hopes. However, its breakout was short-lived as it retraced toward lower support zones following broader market turbulence, particularly Bitcoin’s [BTC] rejection at $110,000.
Despite the price fluctuation, analysts believe AAVE’s long-term outlook remains optimistic, supported by technical indicators and historical price patterns.
AAVE’s Volatile Breakout: From Rally to Retracement
AAVE surged nearly 28% earlier in the week, climbing from $253 on Monday to touch $325 by Wednesday. The rally marked a clear breakout above the long-standing resistance at $280. However, by the weekend, profit-taking and market-wide corrections saw the altcoin retrace to $275, raising concerns among short-term traders.
This pattern mirrored broader crypto market volatility, with BTC’s failure to sustain momentum above the psychological $110,000 mark pulling several altcoins, including AAVE, into correction territory.
Weekly Chart Points to Potential Range Formation
The weekly chart reveals deeper insights into AAVE’s current position. Following a strong rally in November 2024, AAVE witnessed an equally sharp correction in Q1 2025, crashing back to its pre-rally low of $125. This complete retracement erased all prior gains, but also laid the foundation for a potential long-term range between $125 and $380–$400.
The mid-point of this range — around $262 — has served as a critical resistance over the past month. The recent breakout above this level, if sustained with a weekly candle close above $280, would be a strong bullish signal.
Moreover, the On-Balance Volume (OBV) indicator has been climbing since April, suggesting sustained accumulation and growing investor confidence in AAVE’s upside potential.
Daily Chart Hints at Bearish Pressure, But Dynamic Support Holds
On the 1-day chart, AAVE’s price structure displays a clear range between $240 and $280, with $260 acting as a mid-range pivot. Despite the breakout earlier in the week, Friday’s session saw a retest of the $260 level. Notably, the retracement occurred amid high trading volume, signaling intense selling pressure.
However, this bearish volume surge hasn’t derailed the bullish narrative entirely. The 20-day and 50-day moving averages (DMAs) are still trending upward, offering dynamic support that could prevent deeper losses. The 50 DMA, in particular, aligns with the lower range boundary around $240 — a key confluence zone that could spark renewed buying interest.
If AAVE closes the week above $280, it would reinforce bullish sentiment and potentially trigger another leg upward toward $320 and beyond. Conversely, a drop toward the $240–$260 support zone could offer investors a favorable re-entry point, especially with strong technical support in place.
Also Read: Aave (AAVE) Surges 30% After Breaking Key Range — Can It Break Resistance at $320?
In summary, AAVE’s recent breakout and subsequent retracement reflect a market still in flux but leaning bullish. Long-term investors may find value in accumulating near key support levels, while keeping an eye on BTC’s influence and broader DeFi market trends.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
