Yearn.finance’s YFI governance token was previously the darling of DeFi, providing investors with massive returns while also becoming a benchmark of the entire sector.
Recent turbulence within the community, coupled with the downturn seen across the aggregated DeFi space, has caused YFI’s price to collapse from its recent highs, with bulls ardently attempting to stop it from seeing further downside.
Just a week ago, the cryptocurrency saw a capitulatory decline that sent it down to lows of $12,000, with this decline marking a full erasure of the bulk of the gains it had seen throughout the recent DeFi bull run.
The dip to these lows was fleeting and followed by massive upside, but the lack of follow-through in the time since seems to indicate that it may have been a relief rally following a bout of capitulation.
The recent rejection at $20,000 was grim and sparked a violent selloff, but bulls are in the process of reverting this as they attempt to retest this key resistance level.
One analyst is expressing caution when it comes to where it may trend next, noting that he is not interested in going long on YFI due to its weak macro market structure.
Yearn.finance Gains Momentum as Bulls Take Control
At the time of writing, Yearn.finance is rebounding following its recent selloff that came about following its harsh rejection at $20,000.
Although the rejection here was grim and weakened its technical outlook, a potential retest of this level could prove to be quite bullish.
That being said, whether or not it can move higher in the near-term will likely depend primarily on where the entire DeFi sector trends.
It has essentially become a benchmark for the sector, and trades as such.
Analyst: YFI Shows Signs of Weakness Following Latest $20,000 Rejection
While sharing his thoughts on where YFI might trend in the near-term, one analyst explained that he is anticipating further downside due to weakness seen while looking towards its macro market structure.
“YFI / USD: That’s a nasty looking rejection from $20,000. Would personally not be long on this,” he said while pointing to the below chart.
Image Courtesy of Cactus. Chart via TradingView.
Bitcoin has been guiding the DeFi sector throughout the past few days, which means that its price action will likely have significant impacts for that of Yearn.finance’s embattled governance token.
Featured image from Unsplash. Charts from TradingView.