After a triple-digit increase from the 50-week simple moving average, the average price is forming an inverted head-and-shoulders pattern (SMA).
After a 180 percent spike in two weeks, the compound price is forming a strong high tight flag pattern.
The cryptocurrency fan club continues to send a message of hesitation and apathy through the bitcoin price.
In a cryptocurrency market marked by weakness and widespread insecurity, the Aave price is sketching a constructive bottoming pattern. Compound price, on the other hand, has shown significant outperformance since the June 22 low. The consequent bullish view is contagious in each case, and it might become a source of FOMO in the DeFi industry.
After temporarily dipping below the strategically significant 50-week SMA on June 22, the Aave price surged almost 110 percent. The rally was halted around the Anchored VWAP, which was $341.73 on January 4, and AAVE entered a corrective phase to remove the price constriction caused by the rally’s ferocity.
At $290.27, Aave pricing is displaying the right shoulder of an inverted head-and-shoulders pattern along the 50-day SMA. The bottoming formation’s measured move is 109 percent, putting the price target at $756.00 and pushing AAVE over the all-time high of $707.67 set on May 18.
The underlying AAVE volume profile indicates increasing demand during the rebound from the June 22 low and decreasing volume during the right shoulder’s ongoing construction. It’s a profile that suggests a positive outlook for the future.
Despite the significant advance, the AAVE daily Relative Strength Index (RSI) has stabilized into the mid-range of the indicator, giving AAVE price the momentum runway to hit the all-time high of $707.67 and maybe the measured move goal of $756.00.
The convergence of the 200-day SMA at $339.50 with the Anchored VWAP at $340.04 will be a struggle for the average price before it reaches the neckline of the inverse head-and-shoulders pattern. The Anchored VWAP provided crucial support during the pullbacks in February, March, and April, and will now serve as recognized AAVE resistance.
AAVE/USD chart on a daily basis
A quick look at the AAVE/BTC pair reveals noteworthy relative strength since June 27, as well as the mildness of the present Aave price consolidation in comparison to the larger market. Furthermore, in a period of weakness in the cryptocurrency complex, the volume compression during this consolidation further adds to the credibility of the AAVE pattern and the appeal of the DeFi leader.
Chart of AAVE/BTC on a daily basis
Assume the Aave price closes below yesterday’s low of $251.87 on a daily basis. In that situation, the inverted head-and-shoulders pattern will be nullified, implying that AAVE is attempting a more sophisticated bottoming strategy.
Following the June 22 bottom, compound price soared 180 percent, smashing through barrier related with the 200-day SMA. The rapid rally came after a brief drop below the 2020 high and the 50-week SMA, indicating that important investors are committed to seizing the COMP chance.
Compound price has been forming an inverse head-and-shoulders pattern since the rally high on July 6, with the right shoulder creating support between the 50-day SMA at $356.06 and the 200-day SMA at $418.81. COMP has discharged the overbought condition on the daily RSI as a result of the slight setback, placing the defi token in a stronger position to begin a sustainable, second leg higher for the rally.
The measured move of the bottoming formation is 160 percent, implying a price target of $1,458.00. COMP would be well beyond the all-time high of $928.17 set on May 12 if it gained that much.
The all-time high, representing a 67 percent gain from the current level of the COMP neckline, is a more feasible profit goal for Compound pricing.
Surprisingly, the right shoulder’s current Compound pricing structure has created a cheat opportunity. The COMP right shoulder’s basic double bottom pattern provides an early entrance price of $467.57, allowing COMP investors to start pilot buys before the neckline trigger price of $560.00, cutting their overall buy price.
Only disentangling from the magnet effect of the 200-day SMA at $418.80 stands in the way of Compound pricing.
Daily chart of the COMP/USD
The high tight flag pattern on the COMP/BTC chart adds to the attractive prospect for Compound price. From a low of $0.015 on June 22 to a high of $0.015 on July 6, the pair soared 130 percent before correcting 26 percent. The recovery time should not be more than three weeks.
It’s a powerful pattern that can produce returns of 100% to 200 percent in a short period of time.
Regardless of the little price volatility that have characterized Bitcoin for recent weeks, it is evident that Compound price has broken free and is carving out its own path.
Weekly chart of COMP/BTC
Overall, the increased interest in the decentralized finance (DeFi) field has freed Aave and Compound prices from the broader cryptocurrency market’s swings, putting them in positive patterns with high profit potential if correctly triggered. Furthermore, the fact that several cryptocurrencies in the space are participating only adds to the potential for future FOMO (fear of missing out)./n
