Aave breakdown from the all-time high at $0.9 continues amid a search for formidable support.
Short-term support is envisaged at $0.4, but losses to $0.2 are not out of the picture yet.
The decentralized finance (DeFi) craze has either taken a hiatus or worse; the sector hit its elastic limit, and its bubble burst. Aave is one of the leading projects in the DeFi ecosystem. However, it has lost a significant amount of the value of assets locked in its network. At the moment, LEND is the third-largest DeFi token with a value locked of $1.2 billion. It trials Maker (MKR), which has a $1.8 billion and UniSwap, a decentralized exchange platform is boasting $2.2 billion.
At the time of writing, Aave is trading at $0.43. The ongoing breakdown follows rejection from the descending trendline. This trendline has limited Aave’s price action since its price discovery hit a barrier at $0.9 in August.
Meanwhile, LEND/USD is teetering below 100 Simple Moving Average (SMA) in the hourly timeframe. Besides losing over 20% of its value in the last 24 hours, the token is not done with the downside. Instead, the Relative Strength Index (RSI) emphasizes the bearish grip as it grinds towards the oversold.
LEND/USD 4-hour chart
Support is expected at $0.4, where a reversal could come into the picture. If declines shoot past this buyer congestion zone, the next targets would be $0.2 and $0.1, respectively. On the upside, recovery attempts could hit barriers at the 100 SMA, the trendline resistance, and the 50 SMA. For now, the path of least resistance remains downwards until LEND can establish formidable support.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at firstname.lastname@example.org