Aave Headed Towards Correction: Decreasing Volume & Bearish Div.
AAVEUSDT produced a really interesting pattern when looking at the weekly timeframe, the 23-September week. We have a very strong bearish reversal signal.
Right now though we are giving it a closer look and considering the daily timeframe. Lately, we saw a strong rise in bearish volume followed by a strong decrease in overall trading volume, which is a bearish signal.
Then we have a very strong, long-term bearish divergence between AAVEUSDT and the RSI. Let me show you:
The top was hit in March 2024. We have a lower high in August and then again in September. AAVEUSDT peaked in September so this divergence is really strong.
As is usual, the divergence tends to show up on several indicators at once. The more indicators that show same divergence, the stronger the signal. Here is the daily MACD:
The peak happened in March. The last two highs, August and September, end as lower highs compared to March.
Thus we have the MACD and RSI producing lower highs while AAVEUSDT is producing higher highs. The bearish divergence signals the potential for the reversal of the current trend.
Summary:
➖ Weekly reversal candlestick pattern (shooting star).
➖ High bearish volume followed by decreasing overall volume.
➖ MACD and RSI bearish divergence.
These are bearish signals pointing to lower prices next.
The next drop should activate the long-term accumulation zone. The last chance/opportunity to buy low before the major 2025 bull-market.
Thank you for reading.
Your support is appreciated.
Namaste.
Right now though we are giving it a closer look and considering the daily timeframe. Lately, we saw a strong rise in bearish volume followed by a strong decrease in overall trading volume, which is a bearish signal.
Then we have a very strong, long-term bearish divergence between AAVEUSDT and the RSI. Let me show you:
The top was hit in March 2024. We have a lower high in August and then again in September. AAVEUSDT peaked in September so this divergence is really strong.
As is usual, the divergence tends to show up on several indicators at once. The more indicators that show same divergence, the stronger the signal. Here is the daily MACD:
The peak happened in March. The last two highs, August and September, end as lower highs compared to March.
Thus we have the MACD and RSI producing lower highs while AAVEUSDT is producing higher highs. The bearish divergence signals the potential for the reversal of the current trend.
Summary:
➖ Weekly reversal candlestick pattern (shooting star).
➖ High bearish volume followed by decreasing overall volume.
➖ MACD and RSI bearish divergence.
These are bearish signals pointing to lower prices next.
The next drop should activate the long-term accumulation zone. The last chance/opportunity to buy low before the major 2025 bull-market.
Thank you for reading.
Your support is appreciated.
Namaste.
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