Yearn.finance (YFI) Resumes Downtrend Following Rejection at $20,000
Yearn.finance’s YFI token has been subjected to immense volatility over the past few days.
A variety of different factors have played a role in this, including a myriad of community drama coupled with continued weakness across the aggregated DeFi sector.
This catalyzed a capitulatory selloff that sent the DeFi giant reeling down to lows of $16,000 earlier this week, which came about in the form of a violent decline that was followed by a sharp “v-shaped” recovery to over $20,000.
This recovery has been short-lived, however, as YFI is now in the process of reeling lower once again as the entire space continues seeing heightened weakness.
Analysts are now noting that further downside could be imminent in the near-term, which could lead it down towards $15,000.
This could just be the start of an even deeper correction as well, with traders widely pointing to the formation of a bear-favoring triple-top.
Yearn.finance (YFI) Posts Another Rejection at $20,000 as Outlook Dims
At the time of writing, Yearn.finance is trading down over 3% at its current price of $18,000. This marks a notable decline from its daily highs of nearly $21,000 that were briefly tapped around this time yesterday.
The cryptocurrency hit these highs after it rebounded from lows of $16,000. Whether or not it is able to continue higher in the near-term depends largely on how ardently bulls defend the support at $16,000.
If broken below, YFI could start an intense descent that sends it down to lower-lows around $15,000 and $13,000.
Although its price is sliding lower, the Yearn.finance ecosystem is stronger than ever, and its underlying value may soon outpace that of YFI’s price.
Because YFI is widely viewed as an index bet on all of DeFi, whether or not it rallies higher or plunges lower could depend on the performance of the entire sector.
Analyst: YFI Posts Bearish Triple Top Formation, Making Downside Likely
While speaking about the cryptocurrency’s mid-term market structure, one trader observed that it has formed a triple top pattern, which typically represents a macro high for an asset.
As such, Yearn.finance’s YFI token could be positioned to see some notable downside in the days and weeks ahead.
“Looks like he wants to come back down… pamps postponed till further notice,” he said while pointing to the below chart.
Image Courtesy of Teddy. Chart via TradingView.
As seen on the above chart, it does appear that the trader is targeting a move down towards $15,000.
Featured image from Unsplash. Charts from TradingView.