AAVE Set for Correction Before Eyeing $560, Says Analyst

• Analyst expects rebound after TD Sequential “9” indicates local top.
• $1.7 billion in ETH withdrawn, mostly linked to Justin Sun.
• RSI shows weakening momentum as AAVE struggles below $300 mark.

AAVE is flashing signs of a short-term correction before a potential bullish surge. Crypto analyst Ali Martinez has forecasted a temporary price decline for AAVE, suggesting a drop to $270 as part of a broader bullish setup. The prediction is based on Fibonacci retracement levels, identifying the 0.5 Fib zone as a possible “reload area.” 

Martinez noted that a TD Sequential “9” candle has appeared on the 3-day chart, often a precursor to a local top and short-term retracement. If the correction plays out, the token may regain bullish momentum after touching the $270 level, potentially targeting the $560 resistance zone in the next leg up.

Justin Sun-Linked Wallets Behind Massive Aave Withdrawals

Aave recently recorded $1.7 billion in Ethereum outflows, sparking speculation within the DeFi community. Marc Zeller, a contributor to the Aave protocol, attributed much of the activity to crypto entrepreneur Justin Sun. Data from Arkham shows wallets associated with Sun moved over $646 million in ETH. 

Additionally, HTX, where Sun serves as an advisor, withdrew $455 million. Another firm, Abraxas Capital Management, removed $115 million. Despite the heavy withdrawals, Sun-related addresses still hold approximately $80 million in ETH on Aave. 

AAVE Faces Key Technical Test Below $300

As of July 24, AAVE trades at $288.65, down 0.60% in 24 hours. The token has entered a corrective phase after reaching a local high of $338.77. It is currently testing a crucial support at $283.40, which may provide short-term price stability. A breakdown below this level could send the token to its next support at $213.25. 

The Relative Strength Index (RSI) has dropped to 45.40, indicating reduced buying pressure. Volume has slightly declined, reflecting cautious sentiment among traders. On the upside, reclaiming the $300 level could trigger a move back toward $338.77.

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