Yearn Finance’s governance asset, YFI, was flying north during the European session Wednesday even as the token remained under broader downside pressure.
The YFI/USD exchange rate added $430, or 3.33 percent, to grow towards $13,481 as of 1143 UTC. Its gains came as a part of a market-wide uptrend, led by Bitcoin’s surprising move above $12,000, a crucial resistance level that flipped into support. Altcoins tend to tail the Bitcoin trend.
YFI also rose as traders found short-term upside opportunities in its ongoing downtrend (71% drop from YTD high). Earlier this week, the token had plunged by as much as 22.43 percent on Binance. Its slump revived the buying sentiment, for traders expected a small upside retracement to yield attractive intraday gains.
A Strong Rebound Ahead?
The possibilities that some of those traders entered the YFI market with a medium-term risk appetite also grew. A pseudonymous analyst, who self-admittedly was short on YFI, said he would scalp his bearish positions for “oversold bounces” near $12,340.
Another cryptocurrency analyst, Credible Crypto, raised his expectations of a full-fledged price rebound.
“I think YFI will eventually recover and go on to make new ATH,” he said.
Still haven't picked up my waifus. I mean wifis…errr $YFI. Re-entered our consolidation range that led to the last parabolic move and flipped daily demand into resistance. I'll see you at 11k friends. https://t.co/QFQerFMjUM pic.twitter.com/cxDlz9SMzD
— Credible Crypto (@CredibleCrypto) October 20, 2020
Daytrader Teddy Cleps also expected YFI to bounce back sharply once it finds a concrete support level. He noted that token might fall to as low as $6,226 before bottoming out.
None of these analysts predicted a zero-value YFI, pointing the responsibility back to its issuing protocol, Yearn Finance.
The yield farming aggregation project faced severe fear, uncertainty, and doubts (FUD) after its founder Andre Cronje’s experimental gaming protocol, Eminence, lost about $15 million of EMN tokens to a bug.
Earlier, traders blamed Mr. Cronje for the security flaw, a sentiment that rippled across the YFI investors as well. Nevertheless, the prolific developer later clarified that people poured the capital into the Eminence smart contracts on their own – especially when he had clarified that the protocol was in a testing phase.
He also said that he is quitting the decentralized finance space altogether after receiving legal threats from EMN speculators.
That left Yearn Finance without a guide for the first time since its launch. Later, the project’s active contributors posted a manifesto, explaining how it would develop – successfully – without central leadership.
“Holding YFI entitles you to signal for real, practical change that improves Yearn. It doesn’t give you the right to tell other contributors what to do. You want something done? Do it.” – the paper stated.
— banteg (@bantg) October 20, 2020
The update projected YFI as a DeFi-version of Bitcoin, another crypto project that, too, exclusively operates on developer consensus – and quite successfully.
The YFI/USD exchange rate added $430, or 3.33 […]