Bitcoin (BTC) bears watched in disbelief as Bitcoin’s price rallied to over $ 57,800 on February 21, prompting a major rally for altcoins. It seems that bullish flags are being printed one after another on coins like Polkadot and Cardano, which are playing predictably.
However, one coin that is not getting the prominence it deserves at the moment is Yearn.finance (YFI), and at present, it appears that a hard sell period could be coming to an end with a potential 50% move to the upside imminent. But first, let’s take a look at why he’s been struggling recently.
Troubled waters for Yearn
To the dismay of investors and traders, On January 20, Yearn.finance retweeted a gif of Pepe the Frog dressed as a magician, with a link leading to the proposal titled “YIP-57: Future of Yearn Funding”.
The article described the plans to mint 6,666 new YFI tokens for the treasury of Yearn, thus increasing YFI’s supply by more than 20% and in turn, a red 24.45% candle was printed on the daily chart.
After the hard sell subsided, the price slowly gained momentum again. However, about two weeks later, on February 4, there was a $ 11 million exploit in yDAI, prompting the following tweet:
“We have noticed that the yDAI vault v1 has been exploited. The exploit has been mitigated. Full report below.”
This led to a new sale of YFI, printing another 15% red candle in a single day. Nevertheless, Despite all this bad news, the price unexpectedly surged 50% to a new all-time high of $ 52,700., three days before Bitcoin broke the $ 50,000 barrier.
But was it something unexpected? OR it is simply a bullish flag that is developing, although for a slightly prolonged period of time, due to knee-jerk sales?
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, and after the price consolidated over a 10-day period, the price broke a classic bull flag structure before the bad news began to circulate, causing holders to lose faith in founder Andre Cronje.
Nevertheless, once the news got through, it was clear from the 52% gradual increase in price that bullish investor sentiment had returned, which coincidentally was the same size as the bullish flagpole that somehow failed.
The good news for YFI holders is that the charts now show the exact same pattern with a 50% candle, which would push the price target to $ 65,770.
$ 200,000 at stake for the price of YFI
In 2020, YFI was trading above Bitcoin, and even taking into account the newly minted tokens, the rise is simply staggering.
Without taking into account the additional tokens, the raise to return to its previous value in satoshis (sats value) would be more than 450% of the current price.
However, even deducting 20% from this level – which would represent a move towards the Fibonacci (fib) level of 0.786 – the potential upside target is still around 350%. In other words, this puts YFI at a staggering $ 200,000 per coin..
DeFi has a lot of momentum right now
Although the perspective of Paying $ 200,000 per coin may seem crazy, just see how well other projects are doing in the DeFi space. Uniswap, SushiSwap and PancakeSwap managed to reach 10 times their value since Christmas.
But they have all rallied completely above their previous value in satoshis, so now is the time to look for something that hasn’t made this move yet, and right now, in my opinion, the biggest and most obvious one to follow is Yearn.
You just have to look at the UNI / BTC chart to see it right now. Everything about YFI screams “buy”, since even a move just to the 0.236 Fibonacci level would represent a 70% increase in price.
Bullish and bearish scenarios
If there’s one thing Yearn.finance has taught us, it’s to always expect the unexpected when testing.
Right now, there is a important checkpoint around $ 39,000 that the price keeps reviewing and that serves as support.
If this level continues to hold, a move towards the overhead resistance of the current channel around $ 55,485 is the first target, before the wider breakout towards $ 65,000.
In case the $ 39,000 does not hold, it would look for a support around $ 32,500, something that doesn’t worry me, unless another Andre project gets underway.
Points of view and opinions expressed here are solely those of @officiallykeith and do not necessarily reflect the views of Cointelegraph. Every investment and commercial movement involves a risk. You should do your own research when making a decision.
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