AAVE Falling Wedge Nears Breakout: $145 Key Support Level

Technical analysis shared by market expert Ali Martinez on January 23 reveals AAVE trading within a falling wedge formation on its 4-hour chart. This pattern is characterized by a series of lower highs, capped by a descending trendline, while support has remained relatively stable near the $145 region. The formation typically represents a period of consolidation after sustained downside pressure, indicating that selling momentum may be gradually exhausting as buyers defend a crucial price floor.

The significance of the $144.93 support zone is underscored by its repeated role as a demand area during the current downtrend. Since peaking above $350 earlier in the market cycle, AAVE has experienced a steady corrective move, successively losing key horizontal levels near $240, $200, and $162. Each breach shifted short-term momentum further in favor of sellers, making the current support range—now with price trading in the mid-$150s—the most critical yet. A clean break below $145, according to Martinez’s analysis, could force an accelerated downside move, with the next major support area situated around $125.

The market now faces two starkly different paths, both hinging on the $145 level. In a bearish scenario, price acceptance below this support and the wedge structure would likely confirm a continuation of the broader corrective trend that has defined AAVE’s price action since last year. Such a breakdown would signal a failure of buyer defense at a level tested multiple times, potentially triggering a swift decline toward the $125 support zone.

Conversely, a successful hold of the $145 support could set the stage for a technical rebound. For this bullish case to materialize, AAVE must not only defend this floor but also achieve a decisive breakout above the descending trendline of the wedge. Such a move would suggest improving market balance and decreased selling pressure, potentially allowing the altcoin to reclaim higher resistance zones. The initial target would be the recently lost level near $162, with a more ambitious recovery potentially extending toward $200 over time. While this would not immediately invalidate the larger corrective structure, it would indicate a significant shift in near-term momentum.

The technical compression occurs against a backdrop of broader market weakness. At press time, Aave trades at $156.99, reflecting a slight 0.76% decline over the past 24 hours, though this follows a steeper near-10% drop to a local bottom around $153. Interestingly, daily trading volume has increased by 6.07% to $362.59 million, suggesting heightened trader interest as the asset approaches this technical inflection point.

With the price compressing toward the apex of the falling wedge, traders should prepare for increased volatility in the coming sessions. The converging trendlines of the pattern indicate that the period of consolidation is nearing its end, forcing a decisive breakout. For market participants monitoring AAVE, the $144.93 level stands as the unambiguous pivot. All eyes are now on whether this repeatedly tested support will finally crack under pressure or solidify as a springboard for recovery, determining the altcoin’s trajectory in the volatile cryptocurrency landscape.