Yearn.finance (YFI) has undergone a strong retracement over the past few weeks and months despite fundamental strength in DeFi. The price of the leading Ethereum-based coin has crashed from its $44,000 all-time high set at the end of August to $10,200 now. This means that the asset has slid over 76% from its all-time high.
This is not the worst performance a DeFi coin has seen. A number of other tokens pertaining to this space have slid even further than 76%, but Yearn.finance’s decline has been the one garnering the most attention.
Here’s what analysts think comes next for the coin in the face of such a strong move lower.
Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom
Yearn.finance Poised to Bounce
Analysts are starting to come to the conclusion that YFI is poised to bounce after its brutal drawdown over the past few weeks. One crypto-asset analyst recently shared the chart below, noting that the cryptocurrency is poised to bounce as it enters a historically important technical region:
“$YFI update I began my YFI long here at 10150, I have more orders down to 9.6K. Been waiting on this area for weeks now. Feels like capitulation and a quick deviation below 10K makes sense to run stops. Typical risk here, nothing special.”
Chart of YFI's price action since listing on Binance in the middle of Binance from crypto trader Chase. Source: YFIUSD from TradingView.com
Blockchain data and analytics firm Santiment has also observed that the on-chain trends for the asset are starting to show positive signs:
“It appears that $YFI is showing some signs of some bullish divergences, based on our research. An increase in whale activity is a good sign, and there appears to be an uptick in active addresses as well. Enjoy our deep dive on the popular #DeFi asset.”
PolyChain Capital, a prominent crypto-asset fund run by the first employee ever at Coinbase, recently purchased around $3 million worth of YFI. This seems to have been the first investment in the Yearn.finance coin by the notable fund.
Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin
Strong Fundamentals Long Term
Analysts remain bullish on YFI despite short-term price action to the downside. Andrew Kang, the founder of Mechanism Capital, recently commented that he thinks Yearn.finance’s effect will continue to grow as its developers roll out new strategies to accrue yield:
“The argument that YFI / Yearn value is dependant on crazy yields is missing the forest for the trees. Yield opportunities continue to grow Future strategies: – 10x-100x leveraged short DAI – Basis/Funding trades – UNI Farming – BAL Farming – L1/L2 Liquidity Bridging – etc.”
This is already starting to take place as Yearn.finance’s developers roll out v2 Vaults.
The argument that YFI / Yearn value is dependant on crazy yields is missing the forest for the trees.
Yield opportunities continue to grow
Future strategies:
– 10x-100x leveraged short DAI
– Basis/Funding trades
– UNI Farming
– BAL Farming
– L1/L2 Liquidity Bridging
– etc— Andrew Kang (@Rewkang) October 4, 2020
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock Price tags: YFIUSD, YFIBTC, Charts from TradingView.com Yearn.finance (YFI) Plunges Toward $10,000 Despite Fundamentals
by Nick Chong on October 30, 2020 at 03:30PM
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