On the 4-hour AAVE/USDC chart, price recently experienced a sharp downside spike before rebounding back toward the $182 area.
The move lower was fast and aggressive, followed by an equally sharp recovery, suggesting forced selling rather than sustained distribution.
Volume expanded noticeably during the downside flush, indicating capitulation-style activity.
After that spike, price quickly reclaimed lost ground and began stabilizing, which often signals that short-term selling pressure has eased. However, price remains below recent local highs, keeping the broader structure neutral rather than decisively bullish.
The chart currently shows AAVE attempting to base after volatility, with buyers defending the post-dip zone but without strong follow-through yet.
Merlijn The Trader’s Trade Setup on AAVE/USDT
The trade setup shared by Merlijn The Trader focuses on a clearly defined short-term structure rather than broader market direction.
TRADE SETUP | $AAVE
Pair: AAVE/USDTEntry: 177.08
SL: 175.57
TP: 180.91
Clear structure.Defined risk.
Execution over opinion.@CFTradercom100K Phase 1 → Risk: 1% https://t.co/lPF3SQmUrI pic.twitter.com/VZ5cMaQrSV
— Merlijn The Trader (@MerlijnTrader) December 19, 2025
Key elements visible on the chart:
- A Change of Character (CHoCH) is marked, indicating a short-term shift from bearish to bullish structure.
- Price moved impulsively higher from the demand zone, validating buyer strength.
- The setup defines:
- Entry: 177.08
- Stop-loss: 175.57
- Take-profit: 180.91
The chart highlights a tight risk framework, with the stop placed below the demand zone and targets aligned near overhead supply. This structure prioritizes execution and risk control, rather than prediction.
Importantly, the setup does not assume continuation beyond the marked targets. It is designed to capture a measured move within the existing range, not a full trend reversal.
How the Two Charts Fit Together
- The 4H chart shows volatility compression after a sell-off, with price stabilizing but still inside a broader consolidation.
- The Merlijn setup zooms into that stabilization phase and outlines a tactical long based on structure and defined invalidation.
Together, they suggest short-term opportunity within a neutral-to-range-bound environment, rather than confirmation of a larger breakout.
As long as AAVE holds above the recent demand zone shown on the lower timeframe, short-term structure remains intact. Failure to hold that zone would invalidate the setup and return focus to the broader consolidation seen on the 4H chart.
