The average price has risen over 60% from its June lows, surpassing the May decreasing trend line.
As the DeFi token pursues higher prices, the compound price skyrockets by 90%, reestablishing multiple support levels.
The maker price reclaims the 200-day simple moving average (SMA), resulting in the second-best week since April.
After six consecutive good quarters in which early investors saw gains of over 200,000 percent, the Aave price dropped 34% in the second quarter. After a 130 percent gain in the first quarter, the compound price declined 15% in the second quarter. The maker price increased by 27% in the second quarter, making it four quarters in a row since trading began.
Aave price reclaimed the May low of $206.81, the strategically crucial 50-week SMA at $210.74, and May’s descending trend line around $225.00 during the recovery from the new correction bottom set in June. It was a technical breakthrough, reestablishing important support levels that can now give AAVE with the potential to withstand the cryptocurrency market’s fluctuations, which have been ongoing since early May.
Aave price is nowhere approaching an overbought reading on the daily chart after a 60% rally from the June low of $165.05, indicating lots of upward potential for the short and medium term. The comparatively high volume behind the price gain, which has not been seen in other cryptocurrencies that have seen higher returns off the lows, adds to the positive AAVE perspective.
At this point, some consolidation is warranted, but Aave price must hold the 50-week SMA, which is currently at $210.74. It would only be a 10% drop from the present price, releasing some price compression and allowing AAVE to rise to the next substantial resistance, the 200-day SMA at $325.00, resulting in a 30% return from the current price.
The rally might continue to the junction of the 50-day SMA at $338.39 and the Anchored VWAP from January 4 at $341.89, indicating a 32 percent gain from the current AAVE price. In February, March, and April, the VWAP served as support, indicating that it would be a significant resistance level.
AAVE/USD chart on a daily basis
If a downturn occurs today, and Aave price fails to hold the 50-week SMA and the May low of $206.81, the bullish view will be canceled, and a retest of the June bottom of $165.05. will have to be considered. Any trading strategy should take into account the 78.6 percent Fibonacci retracement of the 2019-2021 advance at $151.53.
Additionally, when the 50-day SMA approaches crossing below the 200-day SMA in the next days, AAVE will trigger a Death Cross, putting negative pressure on the price.
After plunging nearly 80% from its May high, the newer cryptocurrency’s compound price performance since the June bottom has been a shocker. The COMP’s recovery has been strong and helpful in breaking through barriers and laying the groundwork for higher prices in the months ahead.
COMP has already risen 30% this week, but more significantly, it has reclaimed the May low of $263.63, the 2020 high of $277.66, the 50-week SMA at $290, and the descending trend line from May. When selling spreads during the week, the DeFi token has established a range of support that will be critical.
COMP is activating the Death Cross pattern today, limiting the immediate upward potential to 15%. The 50-day SMA at $393.27 and the 200-day SMA at $399.44 serve as significant resistance for the Compound price comeback.
Compound price is more likely to start pulling back, releasing some of the price compression facilitated by the 90 percent run off the June low. A corrective procedure will further strengthen COMP’s ability to rally to at least the daily Ichimoku Cloud as long as it keeps the important support levels described above.
Daily chart of the COMP/USD
Compound price might face new selling pressure if the decline hits $263.63 on a daily closing basis, putting the COMP June low of $191.76 in jeopardy.
MKR, as one of the most popular DeFi protocols behind AAVE, has shown exceptional relative strength, breaking through resistance formed by the union of May’s descending trend line at $2,587, the 200-day SMA at $2,490, and the Anchored VWAP at $2,565. It’s a bullish sign in a cryptocurrency market beset by indecision, especially when it comes to key resistance levels.
Unlike the big digital assets, Maker’s price did not test or undercut its May low of $1,796, implying that MKR’s weak investors have been totally expelled.
At this point in the recovery cycle, maker price is in a good place. The 200-day SMA, the Anchored VWAP, and May’s descending trend line are now three crucial support levels below it. Those MKR levels, when combined, should limit the fall in the cryptocurrency market if selling accelerates.
The 50-day SMA at $3,231, which represents a 30% gain for MKR investors purchasing against the support noted above, is the only resistance at the current price level. The daily Ichimoku Cloud and the weight of the dropping 50-day SMA will prevent the rally from continuing.
MKR/USD chart on a daily basis
However, suppose Maker price fails to hold the previously mentioned strong support. In that event, MKR will be vulnerable to a new fall that would not only try the 78.6% retracement level of the 2021 gain at $1,873, but also sweep the June bottom of $1,861 and maybe the May low of $1,796, resulting in a 30% loss from current levels.
Overall, significant growth in the daily active addresses data support the rising buying demand in DeFi tokens. A boost in address activity is usually an early sign of rising network confidence and a likely return of 2021’s hot crypto market./n
