Yearn.Finance (YFI) down 25% in 5 days, What Next?
Yfi, Yearn Finance’s governance token, has fallen 25% since the start of the week. The YFI/USD rate fell 5 percent today, and the cryptocurrency fell to $ 22,748.
This happened despite the growth of Yearn Finance’s decentralized finance (DeFi) ecosystem. Yearn.Finance recently entered into strategic mergers with SushiSwap (a decentralized stock market), Pickle Finance (a liquidity pool for top stablecoins), CREAM Finance (a lending platform), Cover protocol (smart contract insurance protocol) and Acropolis (a distributed pension).
Apparently, the yearn Finance partnerships haven’t provided much of a positive air for YFI so far. Although YFI rose exponentially for a month in the first place, it declined this week as a result.
Having said that, the correction seems to be a natural response to an unstable momentum growth. However, because the project is now emerging as a holding in its own right, it does not eliminate the long-term growth outlook of Yearn Finance.
Messari researchers Ryan Watkins and Jonathan Otto, in their final notes, said::
“While the protocol is a coordination mechanism for efficient capital allocation, yearn, the ecosystem, aims to be a growing community of symbiotic financial protocols. Defi’s capital efficiency as a whole. The higher the capital efficiency at defi, the greater the opportunity for yearn to scale up its operations.”
What can happen at the YFI price?
Year Finance wants to become the most important part of the DeFi industry’s capital allocation if all goes well. And central to the growth of the protocol is the adoption of yfi, a token that is currently falling due to psychologically sourced technical installations.
Indeed, YFI / USD has now confirmed that it is pursuing a head and shoulder installation. Traders believe that the formation is bearish because it typically shows a lower price as well as its maximum height. By this logic, YFI / USD can extend the correction movement up to 30%, which is now 25%. That lowers the price target to about $ 15,200.
Meanwhile, support levels around $ 21,600 are trying to keep the price from continuing to fall. If successful, he could pull up the yfi rally to reach $ 28,555 before moving to $ 30,000. If this rally continues, YFI could break its record of close to $ 44,000.