Date: Mon, February 17, 2025 | 04:04 AM GMT
In the cryptocurrency market, major altcoins have struggled to maintain their momentum since the November rally. A rise in Bitcoin dominance, uncertainty surrounding U.S. tariffs under Donald Trump, and the launch of new memecoins by prominent political figures have all contributed to market hesitation.
Amidst this, Aave (AAVE) has not been spared from the downturn, experiencing a 21% correction over the past 30 days. However, a classic bullish pattern is forming, hinting at a potential recovery.
Cup and Handle Formation
On the weekly chart, AAVE made an impressive 150% rally in November, surging from a low of $125 to a peak of $399 on December 16. However, after hitting resistance at the neckline, the price has been in a corrective phase, forming a cup and handle pattern.
Following the rejection, AAVE dropped to a low of $203, finding support at the lower boundary of the handle. It has since rebounded and is now trading around $253, showing signs of completing the handle portion of the pattern.
Looking at the MACD, the indicator suggests bullish momentum is weakening, but the MACD lines remain above zero, indicating that AAVE is still in a broader uptrend. The histogram shows momentum fading, suggesting that further consolidation might be necessary before a breakout.
If the pattern plays out successfully, a breakout above the neckline could send AAVE toward its upside target of $667, aligning with the depth of the cup.
What’s Ahead?
AAVE’s cup and handle formation indicates that while further consolidation is possible, the next big move depends on Ethereum’s price action and Bitcoin dominance. A strong breakout could trigger a significant recovery, but traders should watch for confirmation before making any moves.
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