AAVE price dips under $292 due to strong resistance levels

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AAVE retreats from $332 as short-term head and shoulders signals correction

Highlights

- AAVE rallied to $332 after daily inverse head and shoulders breakout above $306- Intraday head and shoulders forms below $335 with breakdown through $298 neckline- Net outflows exceeded $2.7 million across July 23 and 24, confirming distribution phase

However, signs of exhaustion appeared around the $330 to $335 zone, shifting the short-term tone from breakout continuation to intraday correction. The transition unfolded as bearish structure began forming on lower timeframes, accompanied by a notable shift in spot flow behavior. On the 30-minute chart, a new head and shoulders pattern developed as AAVE failed to hold higher highs. The left shoulder peaked near $326, the head formed near $335, and the right shoulder at $328 failed under declining exponential moving averages. The neckline around $298 was tested multiple times before breaking, confirming short-term distribution. The RSI on intraday charts fell below 40 during the breakdown and has now mildly recovered to 52, hinting at a potential rebound attempt.

AAVE price dynamics (Source: TradingView)

Currently, AAVE is trading in a descending wedge-like structure with lower highs and lower lows. Price is nearing the upper boundary of the wedge, and a break above $292 could trigger a move toward $297 or $305, where the 100 and 200 EMAs now sit. However, failure to reclaim this zone would confirm continued weakness and expose support near $280 and $266.

On-chain outflows reinforce short-term pressure

AAVE recorded net outflows of over $900 thousand on July 23, followed by $1.81 million on July 24. These sustained outflows align with the transition from $332 to sub-$290, reflecting spot selling by large holders or whales. While outflows can sometimes signal accumulation, in this case they coincide with lower highs and breakdowns, supporting the view that recent strength was met with profit-taking and capital rotation.

Despite the short-term correction, the daily RSI near 67 and sustained positioning above $281 keep the broader reversal structure intact. For the bullish daily breakout to remain valid, price must hold above $281 and eventually reclaim the $306 neckline zone. A clean reclaim would reassert momentum, while a breakdown below $280 would shift the medium-term bias back to neutral.

As discussed in our earlier analysis, AAVE’s breakout above $306 was structurally supported by macro accumulation and institutional flows. The current dip reflects intraday exhaustion, not yet a full invalidation of the broader trend. The next two sessions will be pivotal as AAVE tests the balance between correction and recovery.

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