10 JAN 2022 (MON)- Avalanche (AVAX) Report Card

By quantdoge | Daily Crypto Risk Report | 10 Jan 2022


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 AVAX as a token holder.

1A. Top 3 Good News for AVAX HODLERS !!!

2. How Avalanche Performs Relative to Other Cryptos ?

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

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AVAX has undergone 2,521.37% return from USD 3.2068 to USD 84.0622 since 01 Jan 2021. AVAX is the 9th best performing crypto assets among others here.

3. How Resilience Avalanche 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

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AVAX has proven resilience against BTC crash in 0 out of the 4 instances.
During the last 4 BTC market crashes,
When BTC dropped by -13.47 %, AVAX returned -35.01 % at 20 May 2021,
When BTC dropped by -13.13 %, AVAX returned -9.73 % at 22 January 2021,
When BTC dropped by -12.16 %, AVAX returned -9.94 % at 13 May 2021,
When BTC dropped by -11.39 %, AVAX returned -19.33 % at 22 June 2021
           
4. Technical Analysis on Avalanche

4.1. Volume Weighted Average Price (VWAP)

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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 AVAX 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 AVAX (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 AVAX (blue line) to rise to its average level (orange line).

As of 09 Jan 2022, VWAP is suggesting that AVAX is losing significant momentum and is now trading below its volume-weighted average.

4.2. Moving Average Convergence Divergence (MACD)

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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 AVAX 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 AVAX is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that AVAX is losing momentum. 

As of 09 Jan 2022, MACD is suggesting that AVAX is losing significant momentum.

4.3. Bollinger Band

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

Whenever close line (green) touches the lower band (red), it indicates that AVAX 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 AVAX is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 09 Jan 2022, Bollinger Band is suggesting that AVAX has been severely oversold to an undervalued zone.

4.4. Relative Strength Index (RSI)

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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 AVAX 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 AVAX is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 09 Jan 2022, RSI is suggesting that AVAX is neither oversold nor overbought.

4.5. Volume and Price Analysis

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Based on the price and volume trend of AVAX in the past 2 weeks as demonstrated in the chart above, the recent sell-off of AVAX was not accompanied by a huge volume as compared to the sell-off on 22 Nov 2021, where it's obvious that the sell-off on 22 Nov 2021 was accompanied by a huge volume. In addition, AVAX recovered from near USD 80 bottom to USD 120 top before the sell-off last few days, suggesting that AVAX is likely in a consolidation zone. However, should BTC continue to dip, there is a fair chance that AVAX would follow suit as well.

Based on the technical analysis presented above, quantdoge is bullish on AVAX, but I could be wrong, hence please make your careful due diligence before making any financial decision. 

5. Avalanche Risk Profile
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Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Avalanche defined above, AVAX seems to trade at a greater risk level on 09 Jan 2022 as compared to 10 days before on 30 Dec 2021, with its biggest pullback being seen at -16.66% 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. Price Simulation for Avalanche

How did quantdoge simulation perform vs the actual AVAX price movement over the last week ?

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Over the last 7 days, AVAX is trading below the 25th percentile of all quantdoge simulations, indicating that AVAX is oversold and relatively undervalued.

7. Google Trends Analytics

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avalanche network reached its peak in Google Search on 2021-11-21 with a Google Score of 100
Over the last quarter, avalanche network Google Score has decreased 38.91 % from 68.75 to 42.0
Over the last 6 months, avalanche network Google Score has increased 320.0 % from 10.0 to 42.0

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Over the last month, avalanche network is most saught after on Google from Singapore , followed by Switzerland and Philippines.

Singapore and Switzerland are not only classified by World Bank as high-income nations, but they are crypto-friendly nations and crypto hubs where many crypto funds, crypto venture capitalists and crypto entrepreneurs reside. Hence, an increasing interest from these 2 geographical regions are bullish to AVAX as it could mean that crypto venture builders and crypto enthusiasts in these regions are likely starting to research and learn more on AVAX.

8. Developer Activity Analytics

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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.

Avalanche forks increased 160.0% from 105  to 273 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.

Avalanche stars increased 160.95% from 507 to 1,323 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.

Avalanche pull request contributors increased 108.33% from 12 to 25 in the past year.

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If you like my analysis and articles, please follow me at @quantdoge for daily updates.

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quantdoge
quantdoge

Data scientist in crypto and blockchain space.


Daily Crypto Risk Report
Daily Crypto Risk Report

This blog was created by quantdoge, a data scientist in the cryptocurrency and blockchain space to publish daily risk reports on different cryptocurrencies. All published reports in this blog were analyzed with in-house algorithmic trading and quantitative risk management technology. ** 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.

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