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lend lendusd defi crypto token
Nexo Logo

Three Signs the Explosive LEND Crypto Trend Could Come To An End

Tony Spilotro by Tony Spilotro
2 years ago
in Cryptocurrency news, Technical analysis
Reading Time: 3 mins read
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The DeFi craze is showing no signs of cooling off, and each week a new crypto token is on fire as a result. The industry’s hottest token currently, is LEND, a DeFi protocol for lending and borrowing crypto assets.

The altcoin is up over 3000% in 2020 alone, but there are at least three major signs that the current explosive LEND trend is about to end.

DeFi Hype Helps Yet Another Token Climb To Super Stardom

The DeFi hype train is taking investors for quite a ride. Each passing week, another token is stealing the limelight and experiencing soaring gains.

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Recently, the DeFi token Compound was flooding everyone’s Twitter feeds, but this week, its a cryptocurrency called Aave (LEND).

The LENDUSD price chart has been about at bullish as it gets. After falling over 99% from a high of 50 cents a token, a bottom was found at just a fraction of a penny.

Related Reading | What’s Fueling DeFi Token Compound’s Powerful 20% Intraday Rally

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But since the bottom was set in mid-2019, LEND has gone on an explosive over 10,000% rally. Gains like this were common during the crypto hype bubble, but it’s been years since crypto assets moved like this.

It’s primarily driven by the incredible hype currently surrounding the decentralized finance industry. DeFi tokens have been all the rage, not only bringing investors gains through their investments but through other methods.

Some DeFi tokens, such as LEND, allow users to lend and borrow cryptocurrency assets and earn a yield. The added return on investment has made these protocols especially attractive, and their tokens have been crypto industry top performers.

Three Signs That The LEND Trend Could See a Strong Short-Term Correction

But all good things must come to an end, and all uptrends eventually correct and cool off. That may be what’s about to happen in LENDUSD, according to key technical analysis indicators.

On weekly timeframes, there is a massive bearish divergence on the LENDUSD Relative Strength Index. The previous example of a bearish divergence resulted in an over 70% crash.

lendusd rsi bear div

Relative Strength Index Bearish Divergence | Source: TradingView

Next, the weekly MACD shows extremely overbought conditions, represented by a divergence of the two moving averages.

lendusd macd

MACD Overbought on Weekly | Source: TradingView

Lastly, the weekly Average Directional Index reading shows an almost non-existence of bearish pressure, to the point where reversals in the past occurred. The ADX itself is also showing an incredibly strong trend reading of over 80.

lendusd adx

Average Directional Index and Directional Movement Index | Source: TradingView

And while the tool does suggest the trend is about as strong as it gets, it is at these levels when trends usually fizzle out and begin to reverse.

Related Reading | Fund Manager: DeFi Will Propel Ethereum To $1 Trillion Market Cap

Of course, all of these signals could very well be wrong, and both the value of LEND and the DeFi trend could prove to be too bullish for any bearish signals to confirm.

lendusd cup and handle

Bullish Cup and Handle Continuation | Source: TradingView

However, currently, charts are pointing to at least a short-term pullback. Any short-lived pullbacks in LENDUSD could bring the asset back to support, before resuming the current trend.

If this happens, a bullish cup and handle chart pattern could form on the trading pair. This is usually a bullish continuation pattern, so even these bearish signs in the short-term could lead to long-term gains in the end.

Tags: aavecryptoDeFiLENDlendbtclendusdlendusdt
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter at @tonyspilotroBTC and feel free to drop me a line if you would like to work together.

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