After being listed on multiple major exchanges a few weeks after its debut, yearn.finance (YFI) has certainly grabbed the attention of DeFi enthusiasts as it rose a thousand percent within a month. YFI is also featured in the SCN30 Index, now ranked 17th on the list of constituents.
Looking at YFI’s chart on the 4-hour time frame, the big picture still displays a climbing uptrend. However, if you look closely, after YFI reached a new all-time high (ATH) at $44,000 it dipped down and began to create a series of lower highs and lower lows. The EMA9, 25, and 50 are now all trending above the current trading price, exposing weakness in the price actions.
If price begins to crumble, the first level of support would be at the 0.618 Fibonacci’s retracement at $28,000, dropping past this could result in the test on the ascending yellow trendline right underneath.
Flipping back above $40,000 again, however, will resume the bullish momentum. The next resistance to break would be the previous ATH at $44K, while blasting through the level could result in a next stop at the 161.8 Fibonacci at $70,000. If played out correctly, this could provide a 105% upside gain from the current price.
Counting the Elliott Wave, it is very much possible that YFI has reached its peak on wave 5. Now the token is finishing a correction phase with the ABC waves.
What’s the Future for YFI?
Despite the project being a one-man show, YFI creator Andre Cronje has been able to push out new products at an incredible pace. Recently YFI just launched a new protocol dubbed “StableCredit.”
Being listed on a major US exchange Coinbase Pro also added the fuel to its hype, taking the price up over 20% and successfully created a new ATH last week.
YFI is worth so much due to its highly limited supply cap at only 30,000 tokens available. As a matter of fact, this has made YFI the most expensive DeFi cryptocurrency in the world to date. Andre Cronje, the creator of YFI also claimed that he has zero holdings of the governance token and has entirely passed the ability to vote and direct the project’s course to the community, which is certainly a plus for those who have placed their faith and funds in the protocol.
With the DeFi hype continuing to funnel in more fresh liquidity, YFI as one of the leading DeFi projects can go further. The scarcity of its governance token helps as it embeds the image of a rarity to investors’ mind. On the flip side, being a one-man show project, this poses a lot of risk the more the project grows as more weight will be put on Cronje’s shoulder. We recently witnessed how a single line of bad coding can have a tremendous impact on the project like YAM Finance.
Disclaimer: This analysis is the view of the author’s alone, and does not in any way represent trading advice. all traders should trade at their own risk.
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