With big plans for 2022, can AAVE achieve a new ATH?

New year, new quarter and a great candidate for new price action. This is what investors and traders expect from the broader market. In the first two days of 2022, the price development of most Altcoins and even King Coins did not change drastically. However, some altcoins like AAVE are looking stronger at the beginning of the year.

AAVE is on the rise

To accelerate development, DeFi marketplace platform Aave has announced plans to launch a new mobile wallet for users in 2022. She will also switch to Curve Finance and SushiSwap to expand the market size. Indeed, scaling the AAVE protocol could increase Aave’s user base while increasing on-chain activity on the platform.

Recently the protocol team launched a cross-chain governance bridge. This allows the mainnet administration to manage the protocol across multiple networks. In addition, the AAVE community is working to enable gas-free voting and to make governance for the users in the network holistic. Overall, AAVE seems to be gaining momentum with its goals for the first quarter of the new year, especially in ecosystem-oriented developments.

On the price front, AAVE’s chart shows a strong parabolic rally in December after falling to $ 159, a gain of more than 70% over December. As of press time, AAVE price has formed a symmetrical triangle offering hope for a breakout in the days ahead.

Source: TradingView

The question, however, is whether, given the easing upside momentum, the ecosystem-centric developments are enough to recover from AAVE?

HODLer to the rescue

AAVE’s short- and medium-term ROI did not increase as the 7-day and 3-month ROI at the time of writing were -4.9% and -15%, respectively. However, as the Sharpe ratio rises, the asset’s performance appears to be relatively better compared to the “risk-free” asset than it was on 12/10 when it was -7.

Source: Messari

With the weakening of price action, active addresses also decrease. This underlines the lack of activity in the network. Also, in the past few days, some longtime traders appear to have been selling AAVE to take profits as consumption hit more than four million as of December 31st.

Source: Sanbase

Going forward, in addition to restoring activity on the network, HODLer AAVEs that have recently hit the market will have to keep raising prices. In order for the asset to recover from reduced selling pressure, the $ 330 mark will be a major level of resistance, according to the in and out of money indicators.

On the plus side, however, the AAVE team has started work on V3, an open source protocol aimed at creating capital efficiency, reducing risk, and cross-chain bridging. In addition, gas-free voting and more inclusive governance are on Aave’s roadmap for 2022. Many believe this could lead AAVE to close the gap by more than 60% compared to ATH.

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