Yearn.finance’s YFI token has faced intense selling pressure today as the focus shifts back to Bitcoin.
YFI and other blue-chip DeFi tokens have made massive gains in recent days, with the Yearn ecosystem token rising from lows of $ 7,500 to highs of $ 18,000 over the course of an hour.
Other tokens followed in his footsteps and saw similar gains, reviving the aggregated DeFi sector.
Bitcoin’s Sideways trading within the $ 15,000 region that occurred concurrently with this surge was vital for these tokens to maintain their momentum as investors began to shift their focus from BTC to higher risk assets.
Today, however, BTC is pushing higher again, with investors cycling their DeFi gains back to the benchmark cryptocurrency and putting some pressure on these altcoins.
One trader points to the serious support just below the current price of Yearn.finance and negative funding rates as two factors that may indicate that this continued sell-off will be short-lived.
Yearn.finance’s YFI token returns from recent highlights
At the time of writing, Yearn.finance’s YFI token is trading just under 10% at its current price of $ 15,600.
This selloff is coming close to the heels of the cryptocurrency retesting its $ 18,000 highs set from $ 7,500 right after the rally. Resistance here turned out to be quite strong and contributed to the ongoing downturn.
Bitcoin’s break above USD 16,000 also appears to be hindering the price action of Yearn.finance’s YFI and other tokens as investors turn their attention back to the benchmark cryptocurrency.
Until BTC stabilizing and entering a new phase of consolidation, there is a high probability that smaller tokens will be faced with a greater influx of sell-side pressure.
Analyst looks back to YFI if funding turns negative
An analyst shares his views on where the cryptocurrency could evolve in the short term explained that Yearn.finance’s YFI sees funding turn negative despite entering a $ 15,000 region support zone.
As such, it could see a sharp rebound soon.
“Oh … So YFI is testing the support and funding is negative across the board? Allow me,” he said, pointing to the table below.
Image Courtesy of Cantering Clark. Source: YFIUSD on TradingView.
Bitcoin’s price action is likely to significantly impact that of Yearn.finance and others DeFi Tokens. If the cryptocurrency stabilizes, this ongoing DeFi sell-off could prove to be short-lived.
Featured image from Unsplash. Charts from TradingView.