Bitcoin investors (BTC) known as ‘bears’ watched in disbelief as the price of Bitcoin rose above $ 57,800 on Sunday (21), generating a huge rise in the price of major altcoins.
It seems that bullish flags are being printed, one after the other, in cryptocurrencies like Polkadot (DOT) and Cardano (ADA), which are growing in a predictable way.
However, one currency that is not getting the prominence it deserves at the moment is the Yearn.finance (YFI). It appears that a difficult period of aggressive altcoin sales may be coming to an end, with a potential 50% reversal move. But first, you need to understand why YFI has been struggling recently.
Turbulent waters for the Yearn.Finance
Much to the dismay of cryptocurrency investors, on January 20, 2021 Yearn.finance retweeted a proposal from the user known as Pepe on Twitter, with a link to the proposal entitled “YIP-57: Future of Yearn Financing“.
In the article, a plan was created to mint 6,666 new YFI tokens to the altcoin ‘cashier’, thereby increasing the total YFI supply on the market by more than 20%. Right after the announcement, a huge red candle marked the YFI chart, registering a 24.45% drop on the daily chart.
After the YFI’s massive selling movement was dispelled, the price of the cryptocurrency slowly gained momentum again in the market. However, about two weeks later, on February 4, there was a $ 11 million yDAI exploit, generating the following tweet:
“We realized that the yDAI vault v1 was explored. The exploit has been mitigated. Full report below. “
This triggered a new movement of massive YFI liquidation in the market, registering another 15% devaluation in a single day. However, despite all this bad news, the price unexpectedly rose 50% to reach a new record of $ 52,700, three days before Bitcoin broke the $ 50,000 barrier for the first time.
But, was it unexpected? Or is it simply a movement of ‘bulls’ that is developing, albeit for a slightly prolonged period of time, due to automatic reactions to liquidations?
Large bullish flag rated “Monster” on the daily chart
On the daily chart we can see that a 52% candle was printed on January 7, 2021, and after the price had consolidated for about ten days, the price broke through a classic bullish flag structure before bad news started. circulating, causing investors to lose faith in the founder of altcoin, André Cronje.
However, once the news about the new YFI issuance was released and the gradual price increase accumulated 52%, the feeling of optimism in the market returned to Yearn.Finance investors.
The good news for YFI holders is that the chart now shows exactly the same bullish pattern, with a candle that could reach approximately 50%, which would raise the price target to $ 65,770.
$ 200,000 at stake for the price of YFI
In 2020, the price of YFI was higher than Bitcoin, and even after taking into account the newly created tokens on the market, the advantage among cryptocurrencies is simply impressive.
Without taking into account other cryptocurrencies, the Yearn.Finance price would need to rise 450% to reach its value, in Bitcoin, before the fall.
However, even deducting 20% of this level, which would represent a movement towards the 0.786 Fibonacci (fib) level, this still outlines a 350% increase forecast. In other words, this puts the YFI at a level of $ 200,000 for each unit of the cryptocurrency.
DeFi has a lot of ‘gas’ now
While the $ 200,000 forecast for each Yearn.Finance unit sounds crazy, just look at how other DeFi projects are accumulating an impressive appreciation.
Uniswap, SushiSwap and PancakeSwap, for example, managed to achieve an appreciation that has multiplied by more than 10 times its market value since Christmas.
All of these cryptocurrencies have also achieved significant value on a par with Bitcoin. So now is the time to look for something that hasn’t made this move in the market yet, and now, in my opinion, the biggest and most obvious thing to do next is Yearn.Finance.
You just need to look at the UNI / BTC chart to see it now. Everything in YFI points to “buy”, considering that even a ‘small’ change of just 0.236 in the Fibonacci sequence could represent a 70% increase in the price of YFI.
High and low scenarios
If there is one thing that Yearn.finance has taught us, it is always to expect the unexpected during a testing phase.
At the moment, there is a major support point around US $ 39 thousand, a price that continues to be revised and maintained as an important support.
If this level continues to be maintained, a move towards the current channel’s overload resistance, somewhere around $ 55,485, is YFI’s first target, before a broader appreciation until it reaches the price of $ 65,000 .
In the event that $ 39,000 is not maintained by Yearn.Finance, a further support can be plotted at $ 32,500, which is not a concern for me, unless another project is in progress.
The views and opinions expressed here are exclusively of @officiallykeith and do not necessarily reflect the views of Cointelegraph. Every investment and commercial movement involves a risk. You must do your own research when making a decision.