AAVE drops to 200 USD: Two important support levels to follow before expecting a bounce back

Aave (AAVE), one of the leading DeFi protocols, has recently drawn attention by approving a $50 million acquisition program. The goal of this initiative is to acquire up to $1.75 million AAVE each week, based on the protocol's revenue and other factors.

Since the test program was launched in May, 94 thousand tokens, worth over 22 million USD, have been acquired. This deflationary mechanism, combined with the overall strength of the market, has pushed the price of AAVE to 385 USD in August.

However, the market has faced weakening pressure since then. The recent plunge of Bitcoin (BTC) below the important support level of 108,000 USD on November 3rd has sharply pulled down the price of Aave. Currently, the psychological level of 200 USD is a fiercely contested point between the bulls and the bears, with signs indicating that one side is temporarily gaining the upper hand.

AAVE price may decrease by an additional 15%

Data on Taker Buy/Sell transaction volume from CoinGlass shows that in the past 24 hours, AAVE rarely witnessed the dominance of the bulls – a rare trend throughout the past month. This clearly reflects that the bulls still lack the strength to push the price higher, as selling pressure still prevails.

Source: CoinGlassCurrently, the Long/Short ratio is at 0.918, indicating that the selling volume of the Taker side is dominant. Combined with market developments, this figure subtly signals the possibility that the price of AAVE may continue to adjust downward in the short term.

Breaking the price zone confirms the downtrend

On the daily chart, AAVE has been undergoing a downtrend for over a month, consistently creating lower highs and lower lows, in line with the bearish crossover signal between the 20-day and 50-day simple moving averages (SMA).

Source: TradingViewNotably, from May until now, the price action has formed a clear oscillation range (in white) between 221–336 USD. However, recent volatility has pushed AAVE below the lower threshold of this range, turning the 210–225 USD area into a strong resistance zone.

In the current context, the likelihood of prices continuing to decline is high. Investors should closely monitor the next support levels at 170 USD and 141 USD.

SN_Nour