AAVE, the popular decentralized finance (DeFi) token, has once again reached a critical technical juncture on its price chart. As of late January 2025, the cryptocurrency has revisited a resistance trendline that it last broke in June 2020. This momentous price action led to an incredible 6,400% rally for AAVE, propelling its price to a peak at the 1.618 Fibonacci (Fib) extension level. With AAVE now testing this level once again, many analysts are watching closely to see whether history will repeat itself, and if the price can soar towards the $3,500 mark. This article examines the key technical factors that could influence AAVE’s price trajectory in the coming months.
According to Crypto Analyst Ali Martinez,In the attached chart, AAVE’s price movements are marked with key indicators, most notably the TD Sequential pattern, which has become a crucial element for predicting market trends. The black dotted resistance trendline on the monthly chart represents a level that AAVE has struggled to surpass multiple times. The last time this trendline was broken in June 2020, AAVE experienced an explosive upward rally, increasing its value by more than 6,000%.
The TD Sequential indicator, a popular technical tool among traders, is designed to spot market exhaustion and potential trend reversals. In AAVE’s case, the breakout above this resistance trendline in 2020 marked the beginning of a significant price rally, which took the token from just $45 to its all-time high above $500. This surge was largely fueled by the growing adoption of DeFi protocols and AAVE’s role in the ecosystem.
Will $AAVE Repeat History and Surge?
If AAVE successfully breaks through this resistance level, the next logical price target could be as high as $3,500, according to technical projections. This would represent a significant leap from the current levels around $314, indicating the potential for a massive bull run if the broader cryptocurrency market remains supportive.
Several factors could contribute to AAVE’s continued upward momentum, aside from the technical chart analysis. As decentralized finance (DeFi) continues to grow, AAVE’s role in the space remains integral. AAVE is one of the leading platforms for borrowing and lending digital assets, and its platform has become a staple in the DeFi ecosystem. As more capital flows into DeFi protocols, AAVE could see increased demand for its services, pushing the price even higher.
AAVE’s current price action is an exciting development for investors and traders, with the potential to repeat the massive price surge that followed its breakout above the TD Sequential resistance trendline in June 2020. As the token tests the 1.618 Fib level once again, there is a real possibility that AAVE could break through this barrier and surge toward the $3,500 mark, a level not seen since its early days in the DeFi revolution.
However, the path forward is not without challenges. Traders will need to monitor the broader cryptocurrency market and AAVE’s ability to break through key technical levels. If successful, AAVE could set new records, attracting both retail and institutional investors to the growing DeFi space.
