Key Takeaways
Why is AERO’s price down today?
Profit-taking activity, fears of potential token dilution, and market-wide bearish sentiment.
Where can the altcoin’s price go next?
The short-term downtrend is likely to take AERO down to $0.827 and $0.74 next.
On Wednesday, 13 November, it was reported that Aerodrome Finance [AERO] on the Base network and Velodrome [VELO] on Optimism will merge to form a new cross-chain decentralized exchange – Aero.
Dromos Labs, the company behind the two liquidity protocols, will operate across Base, Optimism, and the OP Superchain before expanding to the Ethereum [ETH] network.
Based on each platform’s weight, existing AERO holders will receive 94.5% of the new token supply, while VELO holders will get 5.5%. Despite the coordinated and transparent nature of this DeFi merger, however, AERO’s price has suffered recently.
In fact, CoinMarketCap data revealed that AERO was down 6.36% in the last 24 hours, with its daily trading volume slashed by just over 53%. The selling pressure could be due to fears of dilution and profit-taking. Additionally, Bitcoin’s [BTC] latest price action spurred market-wide fear.
Can AERO make a recovery?
Source: AERO/USD on TradingView
The daily chart revealed a bullish structure after AERO’s move above $0.966. The $1.2-level was a stiff resistance zone, like it had been at the end of September. Though the swing structure (cyan) was also bullish, this move had been entirely retraced.
The OBV formed a lower low on 13 November. This suggested that the selling volume in recent days has been high. Hence, AERO could drop towards $0.74.
Source: AERO/USD on TradingView
The $0.92 region is the demand zone (red box) that had been a launchpad for previous week’s AERO rally. It has now been flipped to a supply zone. This resistance was retested in the hours before press time, and the downtrend continued on the 1-hour timeframe.
The next price targets would be $0.827 and $0.74.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
