Chart shows common supports and resistances based on the price action and Fibonacci. The total evaluation for AAVE is bearish. The coin itself has formed a double top and a head-and-shoulders pattern which is indicative of a selling interest than a buying interest, the coin doesn't have any clear buying pressure above the 0.382 therefore one should be cautions when it comes to investing in this coin as it already visited three times of its all time low which the asset is supposed to be creating a new lower high or maintaining support above the 0.236 for a healthy bullish sentiment. One should confirm first the general bias of the market before buying into this coin for a more confident long position.
The recommended strategy for this coin is to only long it from within 0.236 "followed" by a bull market and to definitely SHORT it in approach of previous resistances such as the 0.618 or 0.5 FIBs especially in bear trends for a more confirmed short sell.
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You do not need to establish trend lines in this graph as it is clear that it only points to the downside, you should focus more on considering this coin as one of the good assets to short during a bear trend "from" previous resistances.
I have a question, how come you are saying short when you predict a possible return to the consolidation range? Thank you!
Wamses
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@Cullit, Great question! The only reason why I put a "SHORT" bias on this coin is that obviously the 200 MA is no longer sitting properly above the 0.236 which depicts a bearish market/sentiment, but it doesn't mean that it won't retrace back to the consolidation range during a bull market. It is likely that I find this coin much better in bear-trend short selling than long-term investment buys as it will only create lower lows and not higher-highs anymore until proven otherwise. If, for example, BTC got rejected on the 68k ATH again down to 60k, AAVE is one of the first coins you should short especially if it touches resistance in that bear trend.