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Is Aave (AAVE) Set for a Breakout? Bullish Flag Pattern Signals Potential Upside Move

Is Aave (AAVE) Set for a Breakout? Bullish Flag Pattern Signals Potential Upside Move

CoinsProbeCoinsProbe2025/01/20 22:55
By:Nilesh Hembade

Date: Mon, Jan 20, 2025, 01:50 PM GMT

In the cryptocurrency market today, the much-anticipated inauguration of Donald Trump has arrived, and altcoins are beginning to gain momentum ahead of the oath ceremony, which is expected to take place in around two hours.

Amid this, Aave (AAVE), a top altcoin which is included in Donald Trump’s World Liberty buying list, has come into the spotlight with impressive gains of over 11%, signaling potential for a bullish upside move as it approaches a key resistance level.

Is Aave (AAVE) Set for a Breakout? Bullish Flag Pattern Signals Potential Upside Move image 0 Source: Coinmarketcap

Bullish Flag Setup

AAVE’s bullish flag pattern started with an impressive rally from the $130 level in November, surging all the way to the $400 resistance level. After hitting this peak, the price entered a consolidation phase, forming the characteristic downward-sloping parallel trendlines of a bullish flag.

Is Aave (AAVE) Set for a Breakout? Bullish Flag Pattern Signals Potential Upside Move image 1 Aave (AAVE) 1D Chart/Coinsprobe (Source: Tradingview)

Today, AAVE has bounced strongly from its lower support level, finding additional backing from the 50-day moving average at $318. The token is now trading at $348, approaching the upper boundary of the flag, which acts as critical resistance.

If AAVE manages to break above the resistance trendline (~$360-$365), it could trigger a significant rally toward its short-term target of $400. A breakout above $400 could further fuel bullish momentum, potentially driving the price toward higher targets of $450 and $500 in the medium term.

MACD Momentum: The MACD indicator remains in bullish territory, reinforcing the notion that upward momentum is intact and supporting the likelihood of further price appreciation

What’s Next for AAVE?

AAVE is at a pivotal moment as it tests the upper boundary of the bullish flag pattern. A decisive breakout above the resistance could validate the bullish continuation and set the stage for a significant upward move toward $400 and beyond. Conversely, failure to break out may lead to continued consolidation within the flag, with the lower support level at $318 playing a crucial role in maintaining the bullish setup.

Conclusion

Aave (AAVE) is showing strong potential for a breakout as it approaches the resistance of its bullish flag pattern. With momentum building and technical indicators supporting an upside move, AAVE could be poised for substantial gains in the near term. However, as always, traders should monitor volume and price action closely to confirm the breakout before entering positions.

Disclaimer: This article is for informational purposes only and not financial advice. Always conduct your own research before making investment decisions.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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