Ahead of AAVE technology breakthrough, market sentiment shifts to 'long dominance'... Securing $179 is key

Current Situation: Resistance Zone Entry at $172

AAVE is currently trading near $174.72, approaching the upper boundary of the downward channel formed since mid-August. This resistance zone is not just a simple price level but also overlaps with the 50-day moving average(EMA) at $176.99, forming a double technical barrier. Technically, breaking through this zone upward could signal a short-term bullish reversal, and on-chain and off-chain indicators are increasingly supporting this possibility.

Key Breakout Condition: Closing Above $179.27

For a bullish scenario to materialize, certain technical conditions must be met. First, the upper boundary of the downward channel must be clearly broken, and simultaneously, a daily close above the resistance level of $179.27 is required. Achieving both conditions at the same time can be considered a “signal.” If the breakout succeeds, the technical target suggests potential upside to $267.68, projecting the width of the channel.

Momentum indicators are also signaling a bullish bias. The RSI has risen above the neutral 50 level(50) to 53, indicating increasing upward momentum, while the MACD shows a golden cross with expanding green histogram bars. This suggests that buying momentum is being technically reinforced.

Market Sentiment Data: Return of Buying Pressure and Whale Movements

In analyzing on-chain and derivatives indicators, the focus is not just on “price rising” but on understanding “which entities are moving and with what sentiment.” In the spot market(spot), cooling signals are emerging as overheated conditions subside(and cooling signals), while buying dominance is simultaneously forming. This indicates a situation where stable buying demand is entering without aggressive overbought conditions.

In the futures(futures) market, large whale orders are being detected, suggesting institutional players are accumulating. This is interpreted as structural capital inflow rather than emotional buying from retail investors.

Derivatives ‘Fund Flow’ Signal: Funding Rate Flip

In derivatives(derivatives meaning: financial products like futures and options that track the underlying asset’s price movements), the key indicator to watch is the funding rate. AAVE’s open interest weighted funding rate has turned positive at +0.0070%. This indicates that long position holders are paying short position holders, establishing a long-biased structure.

Historically, whenever AAVE’s funding rate flips from negative to positive, strong rebounds have followed. The reappearance of this signal itself is a significant evidence of a shift in market sentiment.

Entry Strategy from a Buying Perspective

The entry zone for cautious capital is suggested between $176.99(50-day EMA) and $179.27(daily resistance). This range provides the first opportunity to test resistance, and additional entries after confirming a daily close above $179.27 are considered more reliable.

Setting a stop-loss at the weekly support level of $158.27 is reasonable. This level is near a double bottom formation and also holds technical significance.

Opposite Scenario: Failure to Break Through and Downward Path

If the above conditions are not met and the breakout fails, the market is likely to revert to a downward channel trend. In this case, the first downside target is the December 31 low of $146.63, which also coincides with the midpoint of the channel. Considering downside risks, setting stop-loss orders and managing position sizes carefully become critically important.