AAVE has seen more than 120% increase since mid-April, but a pattern coming up in the price chart shows that it could be ready to dip or take a very long retracement. The token recently touched the $330 area before pulling back to around $310. This drop is making traders wonder if the latest rally might soon run out of steam.
Analyst Ali has pointed to a potential “M” pattern forming on the daily chart. He explained that if the structure plays out fully, the Aave price could be on its way back to $230. This warning comes as the market cools off after a strong summer run for AAVE.
What the M Pattern Means for AAVE Price
An “M” pattern, also known as a double top, happens when an asset rallies up to the same resistance level twice but fails to break higher. This often signals that buyers are losing strength while sellers begin to step in. If the neckline of the pattern breaks, the price usually makes a sharper move lower.
In AAVE’s case, the chart shows two peaks forming near the $330 area. The rejection from this zone suggests that the token may not have enough momentum to break through just yet. If the pattern continues to develop, the Aave price could roll over and retrace to much lower levels. Ali highlighted that the key downside target in such a setup would be around $230.
Breaking Down the Aave Chart
The daily chart shows that AAVE had a strong rally from below $200 in mid-April to a recent peak just above $330. After this rise, the price faced rejection and started moving down. Key levels on the chart are $278, $262, and $231. The dotted path on the chart shows a possible scenario where the token keeps falling from $310 toward those lower support zones.
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The $278 level stands out as a midpoint support that could temporarily slow down the decline. However, if sellers remain in control and momentum continues to fade, the Aave price might break through that support and aim for $230 as Ali suggested. This would confirm the full “M” pattern and mark a deep retracement from the recent highs.
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