Aave Forms Sell Signal That Led To 27% Average Correction Last 4 Times
August 22 2024 - 8:00PM
NEWSBTC
An analyst has pointed out how Aave is currently forming a bearish
pattern that led to significant drawdowns the last four times it
occurred. Aave Is Showing A TD Sequential Sell Signal Right Now In
a new post on X, analyst Ali Martinez has discussed about a Tom
Demark (TD) Sequential signal that has taken shape in AAVE’s 1-day
price chart recently. The “TD Sequential” here refers to a popular
technical analysis (TA) indicator that’s generally used for
locating probable points of reversal in any asset’s price. This
indicator has two phases: the setup and the countdown. In the first
of these, candles of the same polarity (that is, whether red or
green) are counted up to nine. When these nine candles are in, the
asset may be considered to have reached a point of trend
exhaustion. Related Reading: Bitcoin Investors Be Warned: Legendary
MVRV Ratio About To Death Cross Naturally, if the candles leading
up to the setup’s completion had been green, then the TD Sequential
would give a sell signal. Similarly, nine red candles would suggest
a potential turnaround towards the upside. The second phase, the
countdown, begins as soon as the setup is finished. This phase
works much like the first one, except for the fact that candles are
counted until thirteen here, not nine. Once these thirteen candles
are also in, the price could be assumed to have arrived at another
likely top or bottom. Aave has recently finished the first of these
TD Sequential phases recently, as the chart shared by the analyst
showcases. As is visible in the graph, Aave has finished a TD
Sequential setup with nine green candles recently, meaning that the
coin could have reached a potential top, at least from the
perspective of the indicator. This TD Sequential signal has emerged
for the cryptocurrency after its price has significantly
outperformed the rest of the sector, showing a sharp rally of
around 28% over the past week. In the chart, Martinez has also
highlighted the previous four instances of the asset forming this
signal. Clearly, the coin’s price went on to register a drawdown
following each of these. More specifically, AAVE saw a drop of 27%
on average after these signals appeared. Given this past pattern,
it’s possible that Aave could end up seeing another similar decline
this time as well. Related Reading: Bitcoin Resistance: Here Are
The Challenges Ahead For BTC In a more positive development, Aave
has seen a burst of activity on its network recently, as data from
the market intelligence platform IntoTheBlock has indicated. It
would appear that the price surge has attracted a large amount of
attention to the asset as the total number of active addresses has
reached its highest point in over a year. AAVE Price Following its
impressive rally, Aave has broken beyond the $134 mark. Featured
image from Dall-E, IntoTheBlock.com, charts from TradingView.com
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