DeFi Comes Roaring Back: Aave, Uniswap, yEarn Lead the Way

Key Takeaways

  • Aave looks ready to retrace towards $44.6 as the TD sequential flashes a sell signal on the 12-hour chart.
  • Uniswap sits on top of a massive support barrier that would absorb downward price pressure.
  • yEarn Finance presents an ambiguous outlook following an impressive 143% bull rally.

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The DeFi market is making a roaring comeback after two months of losses in the wake of Bitcoin’s run-up. Aave, Uniswap, and yEarn Finance are leading the way in gains.

Aave Flashes Sell Signal Following 120% Rally

Aave experienced a significant spike in demand on Nov. 5 that saw its price skyrocket over 120%. The DeFi token went from trading at a low of $26.4 to hit a high of $59 within four days. Despite the significant gains incurred in such a short period, prices could be preparing to retrace.

Technical indicators reaffirm that Aave is preparing to drop. The TD Sequential indicator presented a sell signal in the form of a red nine candlestick on AAVE’s 12-hour chart. This bearish formation estimates that an increase in downward pressure may trigger a one to four daily candlesticks correction before the uptrend resumes.

IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals there are no significant demand barriers that will prevent the lending protocol token from dropping further. Based on this on-chain metric, the only considerable interest area sits between $45.6 and $42.6, where roughly 770 addresses had previously purchased 3.15 million AAVE.

This hurdle may have the ability to absorb some of the selling pressure seen recently. Holders within this price range would likely start buying to prevent prices from deteriorating further. However, if Aave breaks through this layer of support prices would likely plummet to $31.6.

On the flip side, the IOMAP cohorts show that this cryptocurrency is trading below stable resistance. Nearly 300 addresses bought roughly 4.7 million AAVE between $55.5 and $56.2.

Only a…

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