DeFi token Aave faces major correction after soaring 100% in a month

cointelegraph.com:

The price of Aave (AAVE) has more than doubled in a month, but its bullish momentum could be reaching a point of exhaustion.

Notably, AAVE has surged by over 103% after bottoming out locally at $45.60 on June 18, hitting almost $95.50 this July 15. Nevertheless, the token's sharp upside retracement move has brought its price closer to the level that triggered equally sharp pullbacks since early June.

In other words, AAVE has been testing an ascending trendline resistance that constitutes a "bear flag," a bearish continuation pattern. For example, the trendline's previous test on July 9 ended up in a 20% downside move. Similarly, a similar attempt on June 24 pushed AAVE price lower by nearly 30%.

As a result of this distribution behavior, AAVE's ongoing attempt to break above the flag trendline could meet with extreme selling pressure. A pullback could then see AAVE/USD retest the flag's lower trendline near $67.75 as its downside target by September, down almost 30% from today's price. 

Meanwhile, the $76.30-level serves as interim support, primarily due to its history as a price floor in May that preceded a 60% rebound move.

As a rule of technical analysis, the breakdown below $67.75 could see AAVE plunging by as much as the height of the "flagpole" that formed before the bear flag. That would have the token eye $35.50 as its bear flag profit target, down over 60% from the current price.

Conversely, a continued rebound move above the bear flag's upper trendline would invalidate the breakdown setup. In this case, the bullish target for AAVE will likely be the $115-$120 range that served as resistance in June.

More than half of the gains during Aave's price rally have come after its proposal to launch a U.S. dollar-pegged