An analyst has pointed out how Aave is currently forming a bearish pattern that led to significant drawdowns the last four times it occurred.
Aave Is Showing A TD Sequential Sell Signal Right Now
In a new on X, analyst Ali Martinez has discussed about a Tom Demark (TD) Sequential signal that has taken shape in AAVE’s 1-day price chart recently. The “TD Sequential” here refers to a popular technical analysis (TA) indicator that’s generally used for locating probable points of reversal in any asset’s price.
This indicator has two phases: the setup and the countdown. In the first of these, candles of the same polarity (that is, whether red or green) are counted up to nine. When these nine candles are in, the asset may be considered to have reached a point of trend exhaustion.
Naturally, if the candles leading up to the setup’s completion had been green, then the TD Sequential would give a sell signal. Similarly, nine red candles would suggest a potential turnaround towards the upside.
The second phase, the countdown, begins as soon as the setup is finished. This phase works much like the first one, except for the fact that candles are counted until thirteen here, not nine. Once these thirteen candles are also in, the price could be assumed to have arrived at another likely top or bottom.
Aave has recently finished the first of these TD Sequential phases recently, as the chart shared by the analyst showcases.
Looks like the asset has recently seen nine green candles | Source:
As is visible in the graph, Aave has finished a TD Sequential setup with nine green candles recently, meaning that the coin could have reached a potential top, at least from the perspective of the indicator.
This TD Sequential signal has emerged for the cryptocurrency after its price has significantly outperformed the rest of the sector, showing a sharp rally of around 28% over the past week.
In the chart, Martinez has also highlighted the previous four instances of the asset forming this signal. Clearly, the coin’s price went on to register a drawdown following each of these.
More specifically, AAVE saw a drop of 27% on average after these signals appeared. Given this past pattern, it’s possible that Aave could end up seeing another similar decline this time as well.
In a more positive development, Aave has seen a burst of activity on its network recently, as data from the market intelligence platform has indicated.
The value of the metric appears to have shot up in recent days | Source:
It would appear that the price surge has attracted a large amount of attention to the asset as the total number of active addresses has reached its highest point in over a year.
AAVE Price
Following its impressive rally, Aave has broken beyond the $134 mark.
The price of the coin seems to have been sharply going up over the last few days | Source:
Featured image from Dall-E, IntoTheBlock.com, charts from TradingView.com
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
Read more
Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
Close
Disclaimer: The information found on NewsBTC is for educational purposes
only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any
investments and naturally investing carries risks. You are advised to conduct your own
research before making any investment decisions. Use information provided on this website
entirely at your own risk.
