$AAVE Faces a Potential Bull Trap: $138.62 Is the Key Level to Watch
$AAVE is up 1.7%, but is this a genuine recovery or a liquidity grab before another move lower?
My bias remains bearish on AAVE as the 1H structure continues to print lower highs and the bearish trend flip at $138.62 remains intact. The recent sweep above $138.28 could indicate a liquidity grab, potentially trapping late buyers and creating an opportunity for sellers.
Key Market Observations
- Liquidity Sweep: Price moved above $138.28 but has yet to confirm a breakout above the critical $138.62 resistance.
- Bearish Structure: The lower-high formation remains intact, keeping downside continuation in focus.
- Market Flow: Open interest stands at $54.6M, up 2.9% over 24 hours, while funding is positive at +0.0042% and the taker ratio is 1.08x. These figures show positioning and buying activity, but do not independently confirm a bull trap.
Potential Short Setup
Entry Zone: $137.50–$138.20, only after clear bearish confirmation on the 5M or 15M timeframe, such as a rejection wick, bearish engulfing candle, or a structure shift toward lower lows.
Take-Profit Targets:
- TP1: $134.32
- TP2: $132.98
- TP3: $131.87
Invalidation and Risk Management
A decisive 1H close above $138.62 would invalidate this bearish setup and shift attention toward the upside levels at $144.15 and $150.06.
The key is patience. Do not chase the move or enter a short without confirmation. A liquidity sweep alone does not guarantee a reversal, so wait for price action to validate the setup.
As long as $138.62 holds as resistance on a closing basis, the downside scenario remains in focus.
CHIL-WITH-CRYPTO
Disclaimer: This is a technical analysis for educational purposes only, not financial advice. Always manage risk and do your own research.
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