AAVE Stalls at Resistance Cluster, Correction Imminent

AAVE is trading at $129.68 after gaining nearly 3% on the day, but its recent price action suggests that a correction may be imminent.

The DeFi sector has been performing well due to improved on-chain liquidity conditions and a macro environment where risk appetite in crypto is high. Aave, as the dominant decentralized lending protocol, tends to catch outperformance when traders are levering up on-chain.

However, technical indicators suggest that momentum is exhausted at the current level, with the MACD histogram flatlining to zero and the RSI flirting with overbought territory.

The Bollinger Band picture also indicates that AAVE is in the upper quartile of its recent range, and a rejection at $133 could lead to a sharp decline.