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.

1. What is Aave ? 

Aave is an open source and non-custodial liquidity protocol for earning interest on deposits and borrowing assets. Aave is currently integrated with Ethereum, Polygon (Ethereum Layer 2 Scaling) and Avalanche. Users could choose to borrow from Aave at either a fixed rate or at a variable rate. Aave governance token (AAVE) gives token holders the rights to vote on all matters pertaining to the Aave protocol and Aave token holders who stake their Aave could reap their staking rewards over time.

2. Technical Analysis on Aave

2.1. 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 21 Dec 2021, VWAP is suggesting that AAVE price action is picking up some momentum after its huge slide from USD 312 top a month earlier.

2.2. 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 21 Dec 2021, MACD is suggesting that AAVE price action is picking up some momentum after its huge slide from USD 312 top a month earlier.

2.3. 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 21 Dec 2021, Bollinger Band is suggesting that AAVE is neither oversold nor overbought.

3.4. 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 21 Dec 2021, RSI is suggesting that AAVE is being oversold.

Based on the technical analysis presented above, quantdoge holds a neutral stance on Aave, but I could be wrong, hence please make your careful due diligence before making any financial decision. 

3. 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 lower risk level on 21 Dec 2021 as compared to 10 days before on 11 Dec 2021, with its biggest pullback being seen at - 16.86% 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.

4. Monte Carlo Price Simulation for Aave

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

Over the last 7 days, AAVE is trading near the upper 75th percentile of all quantdoge simulations, indicating that AAVE is overbought.

5. AAVE Community Analytics

Number of AAVE Followers In The Last 30 Days

In the last 30 days alone, Aave followers have grown 2.91 % from 14,145 to 14,556 on Reddit. Daily increment of Aave Reddit followers peaked on 28 Nov 2021.

6. Google Trends Analytics

"aave" reached its peak in Google Search on 2021-01-31 with a Google Score of 100
Over the last quarter, "aave" Google Score has decreased 7.24 % from 44.2 to 41.0
Over the last 6 months, 'aave" Google Score has decreased 6.82 % from 44.0 to 41.0

"aave" is mainly sought on Google from Singapore, follow by Slovenia and Estonia this month.

7. 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 123.4% from 188 to 420 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 180.48% from 374 to 1049 in the past year.

Pull Request

Pull request contributor refers to developer who has made a successful improvement/ modification 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 throughout the past year.

Have You Tried Crypto.com Exchange ?

Are you interested in grabbing some AAVE with easy-to-use platform that offers not-so-expensive exchange fees, Crypto.com may be your choice. 

If you are interested in signing up an account/ getting a Visa card with crypto cashback rewards from Crypto.com, you may sign up with quantdoge referral link as follow:

https://crypto.com/app/j2dc67xe82

with the referral code of j2dc67xe82 , where both of us would get USD 25 once you stake for a Ruby card or above.