Investment Disclaimer:

• I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
• Past performance presented here is not an indicator of future performance.
• This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post.
• I do hold a long position in AAVE as a token holder.

This analytics report was written as a follow-up from 19 JAN 2022 (WED)- Aave (AAVE) Report Card

1A. Top 2 Good News for AAVE HODLERS !!!!

• First cross-chain governance proposal passes on Aave
  
  (Extracted from Coin Telegraph)
  
  
• 21Shares launches aave, chainlink and uniswap crypto ETPs
  
  (Extracted from ETF Stream)
  
  

2. How Aave Performs Relative to Other Cryptos ?

Performance of All Cryptos Under Quantdoge Watchlist since 2021 (Sorted by % Return)

AAVE has undergone 86.2% return from USD 88.3262 to USD 164.4645 (27.67% lower from 19 Jan 2022 snapshot) since 01 Jan 2021. AAVE is the 27th best performing crypto assets among others here.

3. How Resilience Aave Is Towards Bitcoin Crash Relative to Other Cryptos ?

Historically, all altcoins are somewhat dependent on Bitcoin price movement and it’s often the case where if Bitcoin falls, most altcoins would follow.

Top 3 Cryptos That Are Most Resilient To Bitcoin Crash During Each of BTC 4 Largest Crashes in 2021

AAVE has proven resilience against BTC crash in 1 out of the 4 instances.

During the last 4 BTC market crashes,

When BTC dropped by -13.47 %, AAVE returned -33.47 % at 20 May 2021,
When BTC dropped by -13.13 %, AAVE returned -19.18 % at 22 January 2021,
 When BTC dropped by -12.16 %, AAVE returned 12.73 % at 13 May 2021,
When BTC dropped by -11.39 %, AAVE returned -21.36 % at 22 June 2021
           

4. Technical Analysis on Aave

4.1. Volume Weighted Average Price (VWAP)

VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when AAVE is closed at the end of every single day. 

Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of AAVE (blue line) to fall to its average level (orange line).

Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of AAVE (blue line) to rise to its average level (orange line).

As of 02 Feb 2022, VWAP is suggesting that AAVE has lost a lot of momentum and is now trading at a deep discount from its week-long and month-long volume-weighted average price. Despite AAVE's attractive valuation at this low price level, there is a risk for AAVE  to continue its fall as crypto market continues to sell off, and it's definitely not a wise move to bulk buying at the current dip as nobody would know where the bottom is.

4.2. Moving Average Convergence Divergence (MACD)

MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).

MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of AAVE closing price from its 12-day EMA. 
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26). 

As MACD (12, 26) goes higher away from Signal (9), it signifies that AAVE is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that AAVE is losing momentum. 

As of 02 Feb 2022, MACD is suggesting that AAVE has been losing a lot of momentum.

4.3. Bollinger Band

Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:

- SMA (20) (blue line), which is the 20-day simple moving average price of AAVE
- Upper Band (orange line), which is computed by adding 2 standard deviations of AAVE on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of AAVE from SMA (20)
- Close (green line), which is the daily closing price of AAVE

Whenever close line (green) touches the lower band (red), it indicates that AAVE is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that AAVE is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 02 Feb 2022, Bollinger Band is suggesting that AAVE is now trading within an oversold territory. 

4.4. Relative Strength Index (RSI)

Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that AAVE is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that AAVE is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 02 Feb 2022, RSI is suggesting that AAVE has been massively oversold across 14-day, 28-day and 32-day moving average trading windows.

4.5. Price and Volume Analysis

Aave's daily active trading volume during its bull run (mid December 2021 to earlier January 2022) is much greater than its current daily volume during the crash. This could be an indication that large Aave buyers who bought Aave during its previous bull run still holding the tokens despite its drastic crash.  

Based on the technical analysis presented above, quantdoge thinks that Aave is undervalued but not sure whether it is a right time to enter a new position now as market continues to sell off , but I could be wrong, hence please make your careful due diligence before making any financial decision.

5. Aave Risk Profile

Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Aave defined above, AAVE seems to trade at a similar risk level on 03 Feb 2022 as compared to 10 days before on 24 Jan 2022, with its biggest pullback being seen at -15.36% on a single day during the last 100 days. However, I could be wrong, hence please make your careful due diligence before making any financial decision.

6. AAVE Community Analytics

Number of AAVE Followers In The Last 30 Days

In the last 30 days alone, Aave followers have grown 2.71 % (0.61% lower from 19 Jan 2022 snapshot) from 14,806 to 15,207 on Reddit.

Daily increment of Aave Reddit subscribers peaked on 15 Jan 2022 (similar to 19 Jan 2022 snapshot). 

There are on average 14 new subscribers who subscribe to Aave's Reddit account daily. (3 less daily new subscribers as compared to 19 Jan 2022 snapshot)

7. Google Trends Analytics

"aave protocol" reached its peak in Google Search on 2021-05-09 with a Google Score of 100
Over the last quarter, "aave protocol" Google Score has increased 21.4 % from 35.75 to 43.4
Over the last 6 months, "aave protocol" Google Score has increased 219.12 % from 13.6 to 43.4

Over the last month, "aave protocol" is most saught after on Google from Germany, followed by United Kingdom and United States.

These 3 countries are classified by World Bank as high-income nations, hence, a high interest from these geographical regions are bullish to AAVE as their citizens are likely to have higher risk appetite and more spare cash to venture into the crypto space.

8. Developer Activity Analytics

Fork

Fork refers to the amount of time where the Github repo of current cryptocurrency is being copied. Higher fork number could mean that this cryptocurrency project is getting more interest in the developers community who likes to explore more on the deep technical of this project.

Aave forks increased 107.87%  from 216 to 449 in the past year. 

Star

Star refers to the number of developers who bookmark the Github repo of current cryptocurrency. Higher star number could mean that this cryptocurrency project is getting more general interest in the developers community.

Aave stars increased 149.0% from 451 to 1,123 in the past year. 

Pull Request

Pull request contributor refers to developer who has made a successful improvements/ modifications on the Github repo of this current cryptocurrency project. Higher number of pull request contributors could mean that there is a high number of commitment given by developers to this cryptocurrency project.

However, a low number also could mean that the developer community of this project applies a strict standard when it comes to code review, so only developers who have published a high quality code with highly impactful features got approved.

Aave pull request contributors stayed stagnant at 2,000 in the past year.

9. Binance Future Activities

There are more traders taking long position on AAVEUSDT futures as compared to the shorters, and the ratio of long accounts against short accounts is increasing as AAVE continues to dip. However, please take note that this is simply just a comparison of accounts that hold long positions on AAVEUSDT futures against those who take short positions on the same underlying. This analytics does not say anything about buy/ sell volume.

AAVEUSDT long-short ratio remains consistently higher than both BTCUSDT and ETHUSDT futures, and this ratio is increasing at a rapid rate.

At the time of writing, although bears are still in control as there are more sell volumes than the buy volumes across BTCUSDT and ETHUSDT futures, the buy volumes are increasing relative to the sell volumes. AAVEUSDT futures have more buy volumes than sell volumes as compared to BTCUSDT and ETHUSDT.

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