Aave faces negative momentum with high volatility as immediate support holds watch: weekly analysis

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Aave falls 7.82% over the week

Highlights

Aave trades at $131.81 with a 7.82% decline over the past 7 days, showing sustained downward momentum.
Price stays below key moving averages with both MACD and ADX confirming ongoing selling pressure and a firm bearish trend.
Aave is expected to fluctuate between $119.22 and $155.86 over the next week, with $115.23 as immediate support and $139.02 as resistance.

Exchange freezes and security incident drive sentiment alongside new Chainlink partnership

Aave froze all V3 and V4 markets this week as a precaution after a Binance hot wallet was compromised, with the attacker depositing $60 million USDT as collateral and borrowing 19,762 WETH, according to TechFlowPost. Aave’s official X account stated that contracts were unaffected and positions remained secure, but new deposits and borrowing were paused until all markets were fully unfrozen on October 30, as reported by TokenPost. Nine assets, including USDT and USDC, are still not eligible to back new borrowing, while a new partnership with Chainlink will bring 24/7 real-world asset pricing for institutional lending and operations on the Horizon platform, The Defiant reported (source: TokenPost).

Oversold signals develop as downside momentum dominates this week’s chart setup

The daily chart shows a sustained move lower with a firm trend, accompanied by high volatility at 20.65%. CCI is in the oversold zone at -150.43, flagging potential selling exhaustion, while RSI is neutral at 35.25. MACD and ADX both indicate selling pressure, reinforcing the current downward momentum. Immediate support is at $115.23 and resistance is noted at $139.02, with the Ichimoku Kijun at $151.41 acting as additional resistance.

Breakout risk rises next week as price approaches key range boundaries

Over the next 7 days, Aave is expected to trade between $119.22 and $155.86, with a 38% probability of an increase and a 62% probability of a decrease. The base scenario sees price fluctuating within this range, capped by resistance near $139.02. A move above $139.02 could open a test of the upper bound at $155.86. If price breaks below $115.23, the lower range near $119.22 becomes the next focus for sellers.

Jainam Mehta, market strategist, notes that Aave (AAVE) faced a sharp 8% decline this week, closing near $132 and entering an oversold state on daily charts. He sees technical selling pressure persisting, with key support at $115.23 and resistance capped at $139.02, while the CCI’s oversold reading signals that selling exhaustion could soon become a theme. News that Aave froze all V3 and V4 markets in response to a major exploit at Binance, then quickly moved to reassure users and launch a Chainlink partnership, illustrates the protocol’s operational resilience but may limit new borrowing flows in the short term. "With momentum still negative but sellers showing fatigue, I’ll watch for a contrarian bounce if $115.23 holds — but a break below puts $119.22 in play for tactical shorts next week."

Earlier, analysts emphasized elevated downside risk and ongoing consolidation for Aave following security-related market freezes. The current analysis not only reaffirms persistent downside pressure but also highlights heightened volatility, with the $115.23 support level now serving as a critical threshold for short-term direction.

Source of Data: AAVE Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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