Yearn.finance’s YFI token has seen some volatility over the past few days and weeks, mainly derived from that seen across the entire market. It has been closely mirroring the price action seen by the benchmark cryptocurrency and its other counterparts.
Where YFI trends in the mid-term should depend largely on whether or not YFI can find any strong support in the mid-$20,000 region, as this has long been a support level for the cryptocurrency.
Furthermore, YFI’s dependence on DeFi usage rates to drive value to the token has made it so that its value is closely tied to the overall state of the DeFi sector, with many investors viewing it as a benchmark for this fragment of the market.
One trader is now noting that the crypto could be on the cusp of seeing an intense mid-term sell-off, noting that it is “bounce or die” for the cryptocurrency.
To justify this sentiment, he points to a key ascending trendline that has been guiding YFI higher over the past month or so. A defense of this level could help lead to further upside.
Yearn.finance Shows Signs of Weakness as Selling Pressure Mounts
At the time of writing, Yearn.finance’s YFI token is trading down just under 4% at its current price of $24,700. This is around the price at which it has been trading throughout the past day.
The weakness seen by Bitcoin as it struggles to hold above $18,000 may be at least partially to blame for this YFI decline, with Ethereum’s tempered price action also striking a blow to it.
Until these two cryptocurrencies can gain some momentum, DeFi altcoins like Yearn.finance’s YFI will likely continue facing intense weakness as well.
It May Be “Bounce or Die” for the YFI Token
From a technical perspective, Yearn.finance’s YFI token is currently trading just a hair above a crucial trendline that has been guiding its uptrend throughout the past month.
One trader is now noting that this trendline may make it “do or die” for YFI, with its mid-term fate being partially or wholly guided by its reaction to this level.
“Bounce or die,” he said while pointing to the clear trendline formed over the past few weeks.
Image Courtesy of Teddy. Source: YFIUSD on TradingView.
Bitcoin and Ethereum should provide the entire market with some guidance in the mid-term, offering greater insights into whether or not Yearn.finance’s price will be able to defend the key trendline it is about to test.
Featured image from Unsplash.
Charts from TradingView.