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The decentralized finance (DeFi) sector continues to grow despite the current downturn in the cryptocurrency market as a whole.
The total amount blocked (TVL) in DeFi protocols currently amounts to US$ 201.45 billion, according to data from the DeFi Llama platform.
Considering that the sector continues to expand, it may be interesting to look for DeFi tokens for diversification in search of profits.
Cryptocurrency analyst firm Santiment highlighted in a recent review four tokens that are signaling a rally: Aave (AAVE), Compound (COMP), Maker (MKR) and Ren (REN).
As Santiment pointed out, it seems these cryptocurrencies have recently hit a bottom. That is, this could be a good buying opportunity:
$AAVE, $COMP, $MKR, and $REN have all shown very clear price bottoms recently. And they have all been accurately predicted by looking at how many active deposits have made up the total address activity of an asset. Read our latest findings!
According to the analytics firm, the pricing funds were accurately predicted by measuring the ratio of Active Deposits to Daily Active Addresses (AD/DAD).
This is a balance between token holder activity and general network activity. AD/DAD is a sort of “panic” level, according to Santiment.
Regarding Aave, Santiment highlighted that it seems the token price likes to grow from this AD/DAD metric base:
“We could suggest that low values of AD/DAD ratio are indicating a nice buy opportunities. Same time higher levels of AD/DAD indicate ‘exit’ points, where holders probably tend to exit their positions.” the company said.
Next, Santiment analyzed the Compound (COMP) token
According to the company, like Aave, Compound’s AD/DAD dropped to an all-time low just a few days ago, which is a good sign.
As for the MKR token, from the Maker platform, Santiment stated that the AD/DAD metric dropped around the end of January.
“We could suggest that it could increase further, not as strong as other tokens, but still.”
Finally, with regard to REN, the analytics platform said that the current moment provides a “very good entry”:
“Then we’ve got a perfect bottomish ‘splash’ around January 22. Active Addresses spike plus Age Consumed spike suggesting that holders have panicked and started to move their bags towards exit.”