Aave (AAVE) Looks Bearish Amid Market Uncertainty, Double-Top Pattern Formed; What's Next?

Amid the ongoing market uncertainty, Aave [AAVE] appeared poised for a price decline in the coming days, having formed a bearish price action pattern

Aave [AAVE] might be headed for a price decline in the coming days as it formed a bearish price action pattern on the daily time frame.

This development follows a bearish divergence on the daily chart, indicating a potential price decrease.

Furthermore, AAVE’s price outlook was influenced by market sentiment and the likelihood of profit booking in the altcoin.

A deeper look into AAVE’s on-chain metrics, as reported by the analytics firm Coinglass, revealed that Aave’s Spot Inflow/Outflow showed that exchanges encountered a significant inflow of over $5.2 million worth of AAVE.

In the cryptocurrency domain, inflow signifies the movement of assets from wallets to exchanges, which could hint at potential selling pressure that might lead to a price decline.

According to Coinglass, traders appeared to be betting on the short side, anticipating a potential price decrease.

At press time, AAVE’s Long/Short Ratio was 0.79, which was the lowest since late November 2024. A ratio below 1 indicates bearish sentiment among traders, with a higher proportion of traders betting on the short side.

Of the top AAVE traders, 58.9% held short positions at this time, while 41.10% held short positions.

This aligns with the recent formation of bearish price action, suggesting that both traders and long-term holders might be leaning more toward short positions, contributing to a bearish outlook for the asset.

Technical analysis of Aave (AAVE) reveals a bearish double-top price action pattern on the daily time frame. A bearish divergence on the daily chart can be observed.

Based on recent price action and historical momentum, the asset is likely to drop by 18% and reach the $290 mark in the near future.

At press time, AAVE was trading at around $350 after a price decline of over 9% in the past 24 hours.

During the same period, its trading volume dropped by 28%, indicating reduced participation from traders and investors amid the bearish price action.