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Key Takeaways
What triggered AERO’s 9% rally on the 15th of September?
The Base Solana bridge announcement juiced AERO bulls, who likely viewed the expected liquidity improvement as net positive to the native DEX, Aerodrome Finance.
Will the altcoin’s uptrend extend?
It depends on the tone of the Fed rate decision. A dovish cut could fuel another 30% run with an upside target at $1.6. But a bearish tone could drag it towards $1.1.
Aerodrome [AERO] Finance, the native DEX (decentralized exchange) on Ethereum L2 Base, jumped about 9% on the 15th of September.
The upswing followed the Base announcement that it has rolled out a Solana [SOL] bridge to improve liquidity between the two ecosystems. Additionally, the L2 network said it was exploring a token to support its builders.
As the native and one of the leading DEXes on Base, AERO would capture most of the projected liquidity.
This expectation appeared to be a short-term catalyst, lifting the AERO from $1.15 to $1.37. But part of the gains were erased as of press time.
Will bulls reclaim $1.30?
Source: AERO/USDT, TradingView
The 25 bps Fed rate cut is already priced in. So the AERO price reaction could be measured. However, a surprise jumbo interest rate cut could send it flying.
If so, the altcoin could reclaim $1.3 as support and raise the odds of eyeing the upper channel around $1.6. That would be a 30% potential gain if hit.
On the contrary, failure to hold above the mid-range and subsequent OBV drop below the trendline support could reinforce the short sellers’ edge.
In such a case, AERO’s pullback could hit $1 or below near the lower channel.
Massive price magnetic zone at $1.1
A move lower to $1 was supported by the liquidation heatmap on the Bybit exchange. Per the monthly chart, the closest liquidity cluster was at $1.1 with about $8 million.
On the upside, there were other pockets of liquidity at $1.4 and $1.6 (coinciding with the upper channel).
Source: CoinGlass
Put simply, there was a higher chance of tagging the nearest liquidity before going for the one around $1.6.
That said, after adding long positions in the past three days, Binance’s top traders trimmed exposure ahead of the Fed rate decision.
Their long positions slipped from over 68% to 65% in the 24 hours, underscoring some caution amid the expected mid-week volatility.
Source: CoinGlass
On the price charts, AERO was bullish and could post extra gains if the price decisively reclaims $1.3. But, there was some caution ahead of the Fed rate cut decision, which could either rally or retrace the altcoin.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
