AAVE surged to close out 2024, reaching a cycle high of $399 in December. However, 2025 has flipped the script, with the token experiencing a steep decline. While the downtrend has slowed since March, AAVE remains in a precarious position.
This week brought a silver lining for AAVE. On March 17, AAVE V3 launched on the Celo blockchain and reached its supply cap in under 24 hours. Despite the broader market downturn, this development has fueled optimism among investors.
A strong start for @Celo on Aave.
— Aave (@aave) March 18, 2025
The supply cap was hit in under 24 hours. pic.twitter.com/qJWzkSlrS2
AAVE’s Correction Phase
AAVE’s weekly chart suggests a bearish trend, with the price forming a lower high compared to its all-time peak in May 2021. Analysts believe the recent price surge was a corrective wave B in an A-B-C pattern. If this count holds, AAVE is now in wave C, potentially dropping to $18.18 based on historical price movements. However, key horizontal support levels could slow or reverse the decline.
Technical indicators reinforce this bearish outlook. The Relative Strength Index (RSI) is below 50, signaling weakness, while the Moving Average Convergence/Divergence (MACD) has formed a bearish cross. These factors suggest AAVE’s long-term trajectory remains downward.
Potential for a Short-Term Rally
Despite the bearish macro perspective, the daily time frame presents a more optimistic scenario. AAVE has been trading within a descending wedge since its December 2024 peak. After dipping to $160.13, AAVE rebounded, holding above crucial support at $175.
A breakout from the wedge could trigger a 35% rally toward the next resistance at $240. The RSI and MACD on the daily chart have formed bullish divergences, hinting at a potential upside move. However, for this bullish scenario to materialize, the coin must sustain a daily close above $175.
Also Read: AAVE Price Prediction: Will Accumulation Trends Drive a Rebound to $250?
AAVE at a Crossroads
While the long-term outlook remains bearish, short-term technicals suggest the coin may stage a relief rally. A breakout above the descending wedge could propel AAVE to $240, but failure to hold key support could see the price decline toward $120. Investors should watch for a decisive move in the coming days.
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.
