Yearn.finance has seen a decent rebound from its recent lows set just a few days ago.
Its ongoing upswing is coming about as Bitcoin and Ethereum consolidate, which indicates that it may be breaking its recent downtrend and beginning to navigate higher as many altcoins start catching some tailwinds created by BTC and ETH’s recent upswing.
There are still some underlying problems that are hampering YFI’s growth, with the Yearn ecosystem currently being caught within a vicious cycle limiting how much value is captured by the token.
Furthermore, the founder’s risk that has been priced into YFI may also be limiting its near-term upside, as Yearn founder Andre Cronje has been playing with multiple experimental projects that have cost speculators significant sums of capital.
There is one key technical level that, if broken, could send it rocketing significantly higher in the coming few weeks.
A further rejection at this level could spell trouble for its near-term outlook and lead to further downside. One analyst is even pointing to $6,000 as a potential downside target.
Yearn.finance Struggles to Gain Momentum Despite Bullish Market
Yearn.finance’s YFI token is currently trading up 5% at its current price of $14,500. This marks a notable surge from its multi-day lows of $13,000 set just a few days ago.
It is important to note that it is still caught within a consolidation phase, as it has been trading around its current price for the past couple of weeks.
Until it breaks above $16,000 and begins marching back up towards $20,000, its technical outlook still slightly favors bears.
Furthermore, the lack of attractive yields on the yVaults leads less value to be captured by YFI, which is hampering its technical strength.
Analyst: YFI Must Break $16,000 to See Further Momentum
While sharing his thoughts on the Yearn.finance token’s technical outlook, one analyst explained that $16,000 is a key level that YFI must overcome in the near-term.
He also notes that a breakdown before here could be dire, putting forth a $6,000 target on the chart he offers below.
“Another diagonal for YFI. $16k is still the level to overcome in order to see strength for continuation. 2 failed/awkward breaks of diagonals previously. Let’s see how we do today.”
Image Courtesy of Cold Blooded Shiller. Source: YFIUSD on TradingView.
Yearn.finance’s near-term technical strength may also reflect that of the aggregated DeFi sector, which means that inflows of capital into beta assets following Bitcoin’s surge could provide it with a boost.
Featured image from Unsplash.
Charts from TradingView.