Bitcoin is surging but the rest of the crypto space isn’t following its lead this time around. Instead, many of the DeFi darlings that led the last bullish impulse, have fallen 10% or more in the last 24 hours. What’s going on with the previously parabolic Chainlink, Yearn.Finance, and Binance Coin? Here’s the good, the bad, and the ugly when it comes to these DeFi tokens and their short-term fate.
The Good: Yearn.Finance Ready To Fly If Footing Can Be Found
Yearn.Finance is one of those magical success stories that comes one only every so often in the crypto market. The asset launched sub-$5,000 but has since more than doubled Bitcoin’s peak price of $20,000.
Today, it remains far more expensive than the top cryptocurrency, and while BTC did absorb capital from the 10% YFI drop, support is currently holding – both horizontally and at the middle Bollinger Band. Holding here could send Yearn.Finance back to retest highs and then some.
Yearn.Finance Daily 10% Drop To Support & Bollinger Bands | Source: TradingView
The Bad: Binance Coin Holding Support, But Reversal Signal Storm Cloud Hangs
Related Reading | Chainlink Monthly Finish Flashes Grand Finale Sell Signals
An evening star pattern may have formed at the top of the recent uptrend – which would be a strong reversal signal. However, support from the February 2020 high in Binance Coin is currently holding up well, despite the 10% intraday drop and potential rejection.
Binance Coin Daily 10% Drop To Support & Evening Star | Source: TradingView
The Ugly: Chainlink Trend Turns Bearish On Daily Timeframes, Trend Line At Risk
Chainlink’s chances of holding up are less likely, according to the Average Directional Index. The tool successfully marked when LINKUSD’s bullish impulse kicked into high gear, and then again when it surprised everyone and went even further upward. Now its flipped bearish and the trend is strengthening.
Several supports have also been lost on the way back down, and all that remains is an uptrend line that’s in grave danger of leaving Chainlink exposed to a deeper correction.
Chainlink Daily 10% Drop Below Support & Average Directional Index | Source: TradingView
As for what’s driving the bearish sell pressure on these tokens – Chainlink, Yearn.Finance, and Binance Coin – could be a number of factors. For one, sentiment surrounding the swap craze has turned extremely negative and investors could be less blinded now that the bubble is bursting.
Or perhaps Bitcoin holding support at $10,000 has prompted profit-taking from altcoins back into BTC. Bitcoin dominance could potentially be bottoming, and the recent bleed from these DeFi darlings could just be the start of the carnage to come.
Featured image from DepositPhotos, Charts from TradingView