AAVE is trading at $162.35 with a 6.26% drop in the last 24 hours and is in a short-term downtrend. RSI at 44.55 is in the neutral zone, MACD shows a positive histogram while giving a bearish signal below EMA20. At this critical juncture, both bullish and bearish scenarios are possible; a resistance break could trigger bulls, a support break bears. Market participants must prepare for both possibilities.
Current Market Situation
AAVE fluctuated in the $156.83 – $177.30 range and experienced a 6.26% loss with $236.94M volume. The short-term trend is downward; price is trading below EMA20 ($168.39). 14-day RSI at 44.55 is neutral, no oversold/overbought conditions. Although the MACD positive histogram implies bullish momentum, Supertrend is bearish and points to $191.04 resistance. 14 strong levels detected across multiple time frames (MTF): 1D (2 supports/2 resistances), 3D (1S/2R), 1W (3S/4R). This structure indicates a consolidation open to volatility. Price action supported by declining volume could determine a clear direction based on the breakout. Traders should review their positions around $166.92 resistance and $157.31 support.
Scenario 1: Bullish Scenario
How This Scenario Unfolds?
The bullish scenario is triggered by the price breaking above $166.9165 resistance (score: 66/100) with a high-volume candle. This breakout invalidates the short-term bearish structure by crossing EMA20 ($168.39) upward. RSI moving above 50 and MACD histogram expansion provide momentum confirmation. Supertrend turning green (above $191.04) adds further confirmation. Breaking 1W resistances in MTF supports a broader rally. Volume increase is essential; exceeding the current $236M indicates buyers entering. In this scenario, general recovery in the DeFi sector and protocol updates could act as catalysts. If no breakout occurs, the scenario invalidates below $166.92 – traders should use this level as stop-loss for long positions.
Target Levels
First target $191.04 (Supertrend resistance), then main target $217.8024 (score: 66/100, R:R ratio ~1.34 from current level). In more aggressive moves, 1W MTF levels could extend to the $230+ band. Partial profit-taking recommended at each target: 50% at $191, remainder at $217. These levels align with Fibonacci extensions and previous highs; traders should monitor volume and RSI divergences.
Scenario 2: Bearish Scenario
Risk Factors
The bearish scenario begins with a close below $157.3123 support (score: 71/100). This breakdown tests short-term lows ($156.83), shifting momentum in favor of bears. If RSI drops below 40, selling pressure increases, confirmed if MACD histogram turns negative. Supertrend bearish structure strengthens, EMA20 rejection continues. A volume spike (1.5x current) signals panic selling. BTC correlation risk is high; BTC weakness below $92k drags AAVE. MTF 1D/3D support breakdowns create a chain reaction. The scenario invalidates with recovery above $157.31 – use this resistance as trailing stop for short positions.
Target Levels
First target $143.6300 (score: 62/100), main target $110.9846 (score: 22/100, R:R ~1.8). If downside continues, 1W supports drop to $100 band. Profit-taking strategy: 40% at $143, 60% at $111. These levels are strong in volume profiles; monitor RSI below 30 and negative divergences. Risk management is critical: Limit position size to 1-2% of capital.
Which Scenario to Watch?
Main triggers: Close above $166.92 (bull), close below $157.31 (bear). Volume confirmation essential – low-volume breakouts carry fakeout risk. RSI divergence (RSI rising while price falls = bull, opposite = bear), MACD crossover, and EMA20 interaction as secondary signals. Candlestick patterns on daily/4H charts (bullish engulfing vs. bearish breakdown) are decisive. Follow leverage effects from AAVE Spot Analysis and AAVE Futures Analysis pages. Volatility is high; risk invalidation levels in every scenario.
Bitcoin Correlation
AAVE has high correlation with BTC (%0.85+); while BTC dropped 2.43% at $92,770, AAVE declined more sharply. Although BTC is in uptrend, Supertrend is bearish – if $92,403 support breaks, general pressure on altcoins increases, accelerating AAVE below $157. If BTC breaks $94,151 resistance ($96k+), AAVE bullish scenario strengthens. Rising BTC dominance implies altcoin-less rally; $90,946 BTC support could test AAVE at $143. Prioritize BTC levels: Supports ($92.4k, $90.9k) bear signal, resistances ($94.1k, $96.1k) bull signal.
Conclusion and Monitoring Notes
AAVE at a crossroads: $166.92 / $157.31 breakouts determine direction. Prepare equally for both scenarios – long triggers for bull, short protections for bear. Monitor daily volume, RSI/MACD confirmations, and BTC movements. MTF levels (14 strong points) provide roadmap; volatility harbors opportunities. Traders should act according to their risk tolerance, avoid emotional decisions. Weekly closes provide final confirmation.
This analysis uses the market views and methodology of Chief Analyst Devrim Cacal.
Source: https://en.coinotag.com/analysis/aave-rise-or-fall-january-19-2026-scenario-analysis
