AAVE Price Tumbles 55% but This Bullish Pattern Signals Rebound Ahead

Key Takeaways

• AAVE is breaking out from a descending wedge
• The AAVE price bounced at the $175 support area.
• What’s the next target, if the AAVE price breaks out?
• Interested in buying or selling AAVE? Read our review of the best exchanges to buy and sell AAVE.

AAVE surged to close out 2024, reaching its cycle high of $399 in December. However, 2025 has flipped the script, as the price plunges, though the decline has slowed since March.

This week brought positive AAVE news. AAVE V3 went live on Celo, on March 17, and reached its supply cap in less than 24 hours.

With the AAVE price trading inside a bullish pattern, the chances of a breakout are even stronger. Let’s look at the price action and see if that will happen.

AAVE Begins Correction

AAVE’s weekly time frame analysis shows an ongoing price decrease since December 2024. This created a lower high relative to the all-time high of May 2021.

The wave count suggests the entire AAVE increase in this cycle was a corrective wave B (red) in an A-B-C structure.

If the count is accurate, AAVE is now in wave C, which could end at $18.18, based on wave A’s length. However, numerous horizontal support levels can trigger bounces before AAVE gets there.

Technical indicators are bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are both falling.

The RSI is below 50 while the MACD has made a bearish cross (black circles), both indicative of a bearish trend.

So, the weekly time frame suggests the AAVE trend is bearish and new lows will eventually follow.

AAVE’s Bullish Pattern

The daily time frame analysis shows that AAVE has fallen inside a descending wedge since its cycle high of $399 in December 2024.

The decline culminated with a low of $160.13, briefly taking AAVE below the long-term horizontal support of $1.75. However, AAVE bounced and prevented a breakdown.

AAVE’s price is nearing the end of the descending wedge and might have broken out. This depends on whether the trendline’s slope is drawn using wick highs or closing prices.

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If the breakout is successful, AAVE could move to the next resistance at $240, increasing 35% from the current price.

Technical indicators and the wave count suggest AAVE will rally since the RSI and MACD have generated bullish divergences.

While the bullish signal is subdued since indicators are below their bullish thresholds, the wave count is also positive. The most likely count shows a completed five-wave decline (red), where wave four was a triangle.

The daily time frame suggests a breakout from the wedge is the most likely future outlook, leading to an increase toward $240.

However, as the weekly chart indicates, the long-term trend is bearish. Therefore, any breakouts are simply relief rallies that could eventually lead to new lows.

AAVE Could Break Out

While the long-term AAVE prediction is bearish, the short-term count provides optimism for a relief rally. If AAVE breaks out from its wedge, it could increase 35% to the $240 resistance area.

A daily close below $175 will invalidate this positive AAVE outlook. If that happens, the AAVE price could fall toward the next support at $120.