3 Factors That Suggest Yearn.finance’s YFI is About to Explode Higher
Yearn.finance’s YFI token has been subjected to immense volatility throughout the past few days, with its price plunging to lows of $7,500 before seeing one of the most intense short squeezes ever.
Within hours of tapping these lows, a sudden influx of buy-side pressure sent it rocketing to highs of $18,000, marking a well-over 100% rally from its daily lows.
This move revitalized the aggregated DeFi sector, causing DEX trading volumes to rocket while investors began rushing back into the embattled sector.
Because the DeFi blue chips have seen sustainable momentum throughout the past few days, there’s a strong possibility that this is just the start of what could be a bull-favoring trend reversal.
The macro climate within the crypto market favors this possibility, as Bitcoin and Ethereum’s immense strength could spark a capital rotation event into higher beta assets like Yearn.finance’s YFI.
So long as BTC remains stable, investors will undoubtedly move to higher risk assets to increase their profitability.
One crypto-focused economist is now pointing to three trends working in Yearn.finance’s favor, noting that they all indicate upside is imminent.
Yearn.finance Maintains Recent Gains as Investors Flood into DeFi Market
At the time of writing, Yearn.finance’s YFI token is trading up 10% at its current price of $15,300. This marks a notable rebound from daily lows of under $13,000.
These lows were set shortly after it rallied to highs of $18,000, with this decline coming about due to aggressive profit-taking.
A sign that this recent move is more than just a dead cat bounce or a short squeeze is that it has not been followed by a sustained decline.
These 3 Factors Could Help Guide YFI Higher
One crypto-focused economist is looking towards 3 trends that indicate altcoins like Yearn.finance’s YFI will be able to push higher in the week ahead.
He calls this week a “risk-on week,” adding that BTC will be trading with risk while altcoins trader like high betas compared to the benchmark cryptocurrency.
“Logic is simple. #1 risk-on week. #2 btc to trade with risk. #3 alts to trade like high betas vs btc. If that holds true we go up strong next week. YFI is spot and has no stops. Size accordingly. Chart is for the bitcoin futures basis.”
The confluence of these trends will undoubtedly favor blue-chip DeFi altcoins like YFI and others.
Featured image from Unsplash. Pricing data from TradingView.
OhNoCrypto
via https://www.ohnocrypto.com
Cole Petersen, @KhareemSudlow
