September has been a rough month for the cryptocurrency market, and Aave also closed the month in a negative posture amid a decline in interest in the market and a worsening macroeconomic environment. But what is the price estimate for AAVE in the rest of Q4, 2022?
Economists have warned that a global recession could be on the horizon, especially if central banks continue to act too aggressively. The U.S. Federal Reserve took a more aggressive stance to fight inflation by raising interest rates, and risk-on assets such as cryptocurrencies tend to suffer in such conditions.
Aave (AAVE) has weakened from $96.95 to $70.66 since September 12, 2022, and the current price stands at $73.17. Today, Crypto Lists Ltd will discuss Aave price estimates from a technical and fundamental analysis perspective. Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk and how much margin you have if trading with leverage.
The crypto market sentiment is still not able to show positive signs
Go directly to
Aave is a decentralized lending system that allows you to lend, borrow and earn interest on crypto assets, all without middlemen. The AAVE cryptocurrency offers holders several advantages; they can vote on changes to rules and policies, while AAVE borrowers don’t get charged a fee if they take out loans denominated in the token. Like other decentralized lending systems on Ethereum, Aave borrowers must post collateral before they can borrow.
This is a successful project that started in 2017 and has become an important part of the Decentralized Finance (DeFi) movement. Many analysts say that Aave has a bright future because it has an even more limited supply than Bitcoin, but the upside potential for AAVE probably remains limited in Q4.
AAVE and most of the major cryptocurrencies remain under pressure after the U.S. central bank hiked interest rates by 75 basis points and reported that rate cuts are not foreseen until 2024. Federal Reserve Vice Chair Lael Brainard said on Friday that monetary policy likely would remain restrictive until it’s clear inflation has slowed amid “very high” price pressures.
Investors continue to stay away from riskier assets, and going forward, the market is going to be hypersensitive to any sort of Fed comments. Brandon Pizzurro, director of public investments at GuideStone Capital Management, said:
“St Louis Fed President Bullard reportedly said the U.S. has a serious inflation problem, and the central bank’s credibility would be at risk if any attempt was made to ease the 2% inflation target. This means more pain for equities and cryptocurrencies; the worst is ahead of us and not behind us.”
Bearish traders who are already holding a position in AAVE can feel confident the downtrend will continue unless the cryptocurrency makes a higher high. The price of AAVE is also correlated with Bitcoin, and if the price of Bitcoin drops below $18000 support, we can see new lows for AAVE.
Technical analysis for AAVE
Aave (AAVE) has weakened from $96.95 to $70.66 since September 12, 2022, and the current price stands at $73.17. Considering the overall bearish market structure and the confluence of resistance levels at around $100, a bearish breakout below $70 appears to be a more plausible scenario. This breakdown could initiate another regression towards the $65 area and beyond.
On the chart below, I marked the trendline, and as long the price of AAVE is below this trendline, we can’t talk about a trend reversal, and the price of AAVE remains in the SELL-ZONE.
Important support & resistance levels for AAVE
The fundamentals of this cryptocurrency are strongly tied to the overall cryptocurrency market, and AAVE might have a hard time holding above the $70 level in the upcoming days. On this chart (the period from January 2022), I marked the important support and resistance levels that can help traders to understand where the price could move. AAVE remains in the “bearish phase, “but if the price jumps above $100, it could be a sign of the negative trend reversal, and the next target could be located around $120. The current support level is $70, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $65. If the price drops below $60, the next target could be located around $50, which represents a very strong support level.
What speaks for the rise in the AAVE price
The fourth quarter of 2022 will likely be a tough period for AAVE, and the outlook for risk appetite in the near term is not looking good. The amount of AAVE traded over the last several weeks saw a decrease, but if the price advances above the resistance that stands at $100, the next target could be located at around $120. Traders should also consider that the price of AAVE is correlated with Bitcoin, and if the price of Bitcoin jumps above $22000, we can see AAVE at a higher price level than the current price.
What indicates further downfall for AAVE
September has been a rough month for the cryptocurrency market, and AAVE also closed the month in a negative posture amid a decline in interest in the market and a worsening macroeconomic environment. The upside potential for AAVE remains limited in Q4, especially after comments from FED that rate cuts are not foreseen until 2024.
Economists have warned that a global recession could be on the horizon, and the consensus appears that the price of AAVE will drop even more. The price of AAVE currently stands above $70, but if the price drops below $60, which represents the important support level, the next target could be located around $55 or even $50.
AAVE price expectations from analysts and experts
September has been a rough month for the cryptocurrency market and AAVE, while investors have lost interest in accumulating more coins. Brandon Pizzurro, director of public investments at GuideStone Capital Management, said that the aggressive monetary policy from the U.S. central bank means more pain for equities and cryptocurrencies. According to Brandon Pizzurro, the worst is ahead of us, and we can see new lows for the cryptocurrency market in the weeks ahead. On the other side, the investor and author of the popular book on financial self-education “Rich Dad, Poor Dad,” Robert Kiyosaki, believes that the cryptocurrency market currently offers many opportunities for smart investing.