AAVE Price Plummets 25% — Oversold Signals Flash Amid Market Panic

Key Takeaways

• WXYXZ correction may be nearing completion at Fibonacci support.
• RSI signals extreme oversold conditions across multiple timeframes.
• Price must bounce soon to avoid further downside continuation.
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AAVE has undergone a significant multi-month correction since its $394 peak in mid-December, culminating in a sharp 25% decline since Sunday.

Despite extreme oversold RSI conditions across the 4-hour and 1-hour timeframes suggesting a potential reversal, there are still no bullish signs.

The descending triangle pattern remains intact, and the market awaits confirmation of a short-term bounce or further breakdown.

AAVE Price Analysis

After reaching a peak of $394 in mid-December, the price of AAVE started its multi-month correction.

Today, April 7, it reached the 0.786 Fibonacci level around $117 after making a 25% dive since Sunday.

Looking at the 4-hour chart, we see this is likely the ending wave Z of the complex WXYXZ correction count since December.

It formed a descending triangle whose support and resistance boundaries have been well respected.

Upon its last interaction with the resistance line, AAVE got rejected it and is now sitting at the support confluence between the triangle’s lower lower and the significant Fibonacci one.

The Relative Strength Index (RSI) fell to the extreme oversold zone at around 16%, values that were last seen in April 2024.

Although wave and momentum indicators indicate that this could have ended the prolonged downtrend, there aren’t any signs of reversal currently.

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The downside trajectory might continue if buyers don’t step in quickly to scoop up the token.

AAVE Price Prediction

Zooming into the 1-hour chart, AAVE seems to be unfolding a smaller degree impulsive move since March 24, with wave (iii) in progress following a breakout below $145.

The 1.0 level reached nearly $114.71 based on Fibonacci extensions from wave A from the assumed ABC correction of the last Z wave.

This means that the price moved the same length as the previous downtrend and can indicate the completion of the ABC correction.

The hourly RSI fell to 14%, reaching extreme oversold conditions as it did on the 4-hour chart, but it shows early signs of divergence—suggesting some caution for near-term traders.

However, the bearing structure remains intact unless the price makes a sharp upturn.

Considering the wave structure and the price levels reached, we will likely see a short-term bounce as a corrective wave (iv) to the 0.786 Fib extension at $131.

It should be followed, but another and the final descending move as the wave (v).

If buyers’ interest increases, there could be a potential double bottom around $114 at the 1 Fib extension level.

But if the price continues moving downwards, our next likely target would be at 1.272 Fib at $93.

Key Levels to Watch

• Immediate Resistance: $131 (0.786 Fibonacci extension – potential wave iv target).
• Key Support: $114.71 (1.0 Fibonacci extension – ABC correction equality).
• Critical Support: $93 (1.272 Fibonacci extension – wave (v) bearish target).
• Short-Term Bounce Zone: Between $114 and $117 (support confluence and RSI divergence).
• Invalidation Zone: Below $93 would indicate extended downside continuation.