Is Aave (AAVE) a buy or sell in January?

Written by: Stanko Iliev
January 12, 2021
  • If the price jumps above $120 resistance again, the next price target could be around $130
  • Aave has released an upgrade version that improves features like flash loans and credit delegation
  • If the price falls below $80, it would be a firm "sell" signal and possibly a trend reversal sign

Aave (AAVE) has advanced from $26 above $120 since the beginning of November, and the current price stands around $116. The primary trend of this cryptocurrency remains bullish, and for now, there is no signal of the trend reversal.

Fundamental analysis: Aave has released an upgrade version

Aave is a decentralized non-custodial liquidity market protocol where users can participate as depositors or borrowers. Depositors earn a passive income by providing liquidity while borrowers are able to borrow on this popular DeFi lending protocol. This project started in 2017 under the name ETHLend, but in 2018 the team decided to rebrand to Aave.

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This service has two types of fees, 0.00001% of the loan amount for borrowers and 0.09% for flash loans. Aave protocol is completely open-source that is secure, and allows you to build any third-party service or application to interact with the protocol.

According to the official website, this platform is entirely risk-free; the only risks related to the Aave platform include the smart contract risk (risk of a bug) and liquidation risk (risk on the collateral liquidation process).

Aave protocol has its cryptocurrency under the symbol AAVE that allows users to vote and decide on the outcome of Aave Improvement Proposals (AIPs). Users can also use this crypto to provide security to the protocol, and they will earn staking rewards and fees from the protocol.

This December, Aave has released an upgrade version that improves features like flash loans and credit delegation. The new upgrade makes this protocol more accessible to its users and allows them to trade their assets for any other available asset on Aave.

“This new version of Aave lets a borrower change their underlying collateral in a very user-friendly, gas-efficient way without ever leaving Aave. If your collateral price starts to fall, for example, you can simply trade it for a stablecoin, so you don’t have to worry about price fluctuations and potential liquidation. Collateral swapping can be a useful tool to avoid liquidations; you could swap your collateral from LINK to AAVE, from ETH to YFI,” said Aave CEO Stani Kulechov.

According to analysts, Aave has a bright future because it has an even more limited supply than Bitcoin, and the main trend of this cryptocurrency remains bullish. Aave (AAVE) could advance even more in the ongoing bull market, but if you decide to buy cryptocurrency this January, you should use a “stop-loss” order because the risk is very high.

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Technical analysis: The main trend remains bullish

Data source: tradingview.com

The main trend of this cryptocurrency remains bullish, and for now, there is no signal of the trend reversal. If the price jumps above $120 resistance again, it would be a signal to trade Aave (AAVE), and the next price target could be around $130.

On the other side, if the price falls below $80, it would be a firm “sell” signal and possibly a trend reversal sign.

Summary

Aave is a decentralized non-custodial liquidity market protocol, and according to analysts, Aave has a bright future because it has an even more limited supply than Bitcoin. This cryptocurrency could advance even more in the ongoing bull market, but if the price falls below $80, it would be a firm “sell” signal and possibly a trend reversal sign.