Bitcoin (BTC) bears watched in disbelief as BTC price surged above $ 57,800 on Feb.21, sparking a major altcoin rally. It appears that bull flags are being printed sequentially on coins such as the polkadot and cardano, which play out predictably.
One coin that isn’t currently getting the spotlight it deserves is Yearn.finance (YFI). A period of aggressive selling appears to be coming to an end, with a possible 50% up movement imminent. But first let’s take a look at why there have been problems lately.
Troubled water for longing
YFI / USD 1 hour candle chart. Source: TradingView
Much to the horror of investors and traders on January 20th, Yearn.finance retweeted a wizard-clad GIF of Pepe the Frog linked to the proposal “YIP-57: Financing Yearn’s Future”.
The article outlined the plans to mint 6,666 new YFI tokens for the Yearn treasury, increasing the YFI supply by more than 20%. In return, a red candle of 24.45% was printed on the daily chart.
After the aggressive sale subsided, the price slowly picked up again. However, about two weeks later, on February 4th, a yDAI exploit of $ 11 million occurred, which triggered the following tweet:
“We discovered that the v1 yDAI vault has suffered an exploit. The exploit has been mitigated. Full report follows. “
This led to another sell-off for YFI, printing an additional 15% red candles in a single day. Despite all of this bad news, the price unexpectedly rose 50% to a new all-time high of $ 52,700 three days before Bitcoin topped $ 50,000.
But was that unexpected? Or was it just a bull flag that played out over a slightly longer period of time due to knee jerk reactions being sold out?
Monster Bull flag on the newspaper
YFI / USD 1-day candle chart. Source: TradingView
Over on the daily chart we can see that on January 7th a candle was printed at 52%. After price consolidated over a 10 day period, price broke out of a classic bull flag structure before the bad news started circulating. Owners lose confidence in founder Andre Cronje.
However, after the news was released, it became apparent from the gradual 52% price hike that bullish investor sentiment had returned, which happened to be the same size as the flagpole on the somewhat failed bull flag.
Now the good news for YFI holders is that the charts are now showing the exact same pattern played with a 50% candle, which would bring the price target to $ 65,770
$ 200,000 for the YFI Prize
YFI / BTC 1-day candle table. Source: TradingView
In 2020, YFI was trading higher than Bitcoin, and even when you factor in the newly minted tokens, the upward trend is just mind-blowing.
Without taking into account the additional tokens, the upward trend on the return to the previous Sats value would be more than 450% of the current price.
Even if 20% is subtracted from this level, which would mean a shift to the 0.786 Fibonacci (fib) level, there is still a potential upside target of around 350%. In other words, this brings YFI to a staggering $ 200,000 per coin.
DeFi is so hot right now
UNI / USD 2-hour candlestick chart. Source: TradingView
While the prospect of paying $ 200,000 a coin seems insane, all you have to do is look at how well other projects are doing in the DeFi space. Uniswap, SushiSwap and PancakeSwap have managed to reach 10x since Christmas.
But all of these factors have fully recovered beyond their previous sats value. Now is the time to start looking for something that hasn’t done this step yet, and in my opinion, Yearn is currently the most obvious one to do next.
All you have to do is look at the UNI / BTC chart to see this now. Everything about YFI is screaming “buy”, and even a move to the Fibonacci level of 0.236 would mean a price increase of 70%.
UNI / BTC 1-day chart. Source: TradingView
Bullish and bearish scenarios
If there’s one thing that Yearn.finance has taught us, it’s always to expect the unexpected when testing in production.
YFI / USD 1 hour candle chart. Source: TradingView
At the moment there is a heavy checkpoint around $ 39,000 that the price checks over and over and serves as a support.
Should this level persist, I would initially focus on a move to the upper resistance of the current channel around $ 55,485 before the broader breakout to $ 65,000.
If $ 39,000 isn’t enough, I would consider $ 32,500 in support, which I’m not worried about unless another Andre project gets tricky.
The views and opinions expressed herein are solely those of @officiallykeith and do not necessarily reflect the views of Cointelegraph. Every investment and trading step is associated with risks. You should do your own research when making a decision.
