Why is AERO’s Price Dropping Today? Profit-Taking Halts Rally at $1.20

Recently, Aerodrome Finance [AERO] and Velodrome [VELO] have announced a merger that will result in the creation of a new cross-chain decentralized exchange named Aero. This merger aims to integrate operations across Base, Optimism, and the OP Superchain and will eventually branch out to the Ethereum [ETH] network. Despite the transparent nature of the merger, AERO’s price has seen a decline due to profit-taking and market fears, particularly influenced by Bitcoin’s price movements.

Key Takeaways

Aerodrome Finance [AERO] and Velodrome [VELO] are merging to create a new decentralized exchange called Aero.
The merger will allow Dromos Labs, the parent company, to function across Base, Optimism, and the OP Superchain, with plans to expand to Ethereum [ETH].
Current AERO holders will receive 94.5% of the new token supply, while VELO holders will get 5.5%.
Recently, AERO’s price dropped by 6.36% in the last 24 hours, with trading volume decreasing by over 53%, largely due to concerns about dilution and profit-taking.
The recent performance of Bitcoin [BTC] has also contributed to market apprehension.

Why is AERO’s price down today? Profit-taking activity stalls AERO rally at $1.2!

AERO's Potential for Recovery

AERO 1-day Chart Source: AERO/USD on TradingView

Analyzing the daily chart, AERO initially displayed a bullish trend after it crossed above $0.966. However, the $1.20 level proved to be a significant barrier, similar to a resistance point observed at the end of September. While the overall swing structure appeared bullish, the gain was completely retraced.

On November 13, the On-Balance Volume (OBV) indicated a lower low, suggesting increased selling pressure in recent days. Consequently, AERO might face a decline towards $0.74.

AERO 1-hour Chart Source: AERO/USD on TradingView

The area around $0.92, previously regarded as a demand zone, has now turned into a supply zone (illustrated by the red box). This resistance zone was retested shortly before the article was published, and the downtrend persisted on the 1-hour chart.

Future price targets for AERO could be around $0.827 and $0.74.

Disclaimer: The information provided in this article is based on the author’s opinion and should not be interpreted as financial, investment, or trading advice.