• AAVE is currently trading at $200 after a 1.96% increase in a day, as it is resisted at $240 and supported at $195.
• Technical analysis indicators point towards a possible bounce as AAVE makes higher lows and is supported above its 50-day EMA while its RSI is recovering from 50.
• Analyst recommends a long entry at $193.98 with a target of $198.09-$206.80 using 5x-10x leverage and a $191.40 stop-loss.

Aave (AAVE) has come under pressure after failing to maintain its positive trend and retreated by 1.49% in the last 24 hours to trade around $201. The decrease in token’s value is a result of its failure to breach through the resistance at $240, and with analysts now closely watching whether the $195 support zone can prevent further losses.

Currently, AAVE is trading at $200.76, marking a 1.96% increase in the past 24 hours. The decentralized finance (DeFi) protocol, with a market capitalization of $3.05 billion, is seeing short-term selling pressure after failing to maintain its recent upward momentum.

AAVE Faces Rejection and Breaks Key Support

According to market analyst Crypto TXG, AAVE tried to move above the $240 barrier, but was firmly rejected, leading to a price pullback. Moreover, AAVE lost its support at $225, causing a deeper retracement of value down to the region of $195.

TXG highlighted that AAVE is currently re-testing its support at $195. A possible bounce to $225 might occur if current support is respected, although a breakdown from this barrier could lead to further declines. This is in line with TXG’s strategy of prioritizing risk management in volatile market conditions, including those present in crypto.

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Technical Setup Hints at Short-Term Bounce Possibility

According to TradingView data, AAVE is displaying signs of a possible short-term recovery after testing the demand zone of around 191-$192, which proved to be a solid support in prior market phases. At present, it is making higher lows while remaining above its 50-day EMA.

The RSI is also seen to have bounced off the midline at 50, a sign that buying interest is slowly building. Volume data confirms higher interest during green candles, indicating that buyers are attempting to regain control after recent losses.

The analyst also issued a signal for a long position on AAVE/USDT with an entry price of 193.98. The take profit points have been placed at 198.09, 202.70, and 206.80, with a stop loss at 191.40. The leverage for this trade is between 5 and 10, resulting in a risk-to-reward ratio of 5.0.

From the analysis above, it is clear that if AAVE sustains its current support, it could form a short-term trend heading towards $225. Failure to do so might lead to a bearish trend in the coming days.

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