As the crypto market suffered a widespread decline, Aave (AAVE) prices dipped by nearly 10%, reaching a local bottom around $153. Presently, the altcoin is trading within a range of $155-$160, but an emerging chart pattern indicates an impending price breakout.
AAVE Falling Wedge Nears Explosion Point, $145 As Key Price Floor
In an X post on January 23, popular market expert Ali Martinez shares an insightful analysis of the AAVEUSD 4-hour chart, showing the altcoin is approaching a critical market juncture. Notably, a key support zone of $144 sits at the base of a broader descending structure that has defined AAVE’s price action since last year. Martinez’s analysis shows that AAVE is trading within a falling wedge formation, characterized by a series of lower highs capped by a descending trendline and relatively stable support near the $145 region. This price formation often represents a period of consolidation following sustained downside pressure, as sellers gradually lose momentum while buyers defend a key floor.
For context, since topping out above the $350 level earlier in the cycle, AAVE has experienced a steady corrective move, with price stepping down through multiple horizontal levels near $240, $200, and $162. The loss of these zones shifted short-term momentum firmly in favor of sellers, making the current support range even more important. At present, AAVE is trading in the mid $150s, leaving limited room before a direct retest of the $144.93 support. However, this level has already acted as a demand zone multiple times during the current downtrend, reinforcing its significance.
According to Martinez’s analysis, a clean break below $145 could force an accelerated downside move, with the next major support area set around $125. In that scenario, price acceptance below the wedge structure would likely confirm a continuation of the broader bearish trend. Conversely, holding the $145 support may provide the conditions for a technical rebound.
A successful defense of this level, combined with a break above the descending trendline, could allow AAVE to reclaim higher resistance zones around $162 and potentially $200 over time. While such a move would not immediately invalidate the larger corrective structure, it would suggest improving market balance and decreased selling pressure.
AAVE Price Overview
At press time, Aave trades at $156.99, reflecting a decline of 0.76% in the past 24 hours. Meanwhile, the daily trading volume is up by 6.07% and valued at $362.59 million. With price compressing toward the apex of the falling wedge, traders should expect increased volatility in the coming AAVE trading sessions. For now, the price moves at $144.93 as a pivotal inflection point for determining the next directional move.
Featured image from Rootsttrap, chart from TradingView
