Yearn.Finance (YFI) has stolen the attention away from most other DeFi tokens, Ethereum, and Bitcoin thanks to an amazing run where tens of thousands per coin in value were added.
But the Ethereum-based ERC20 token has recently broken below and is now retesting the neckline of a massive head and shoulders pattern. If the altcoin falls deeper from here, confirming the pattern, it could soon find itself back being cheaper than Bitcoin once again.
DeFi Token YFI Falls Below Neckline Of Massive Head And Shoulders
The DeFi trend was already blazing hot by the time Yearn.Finance was introduced, but its release sent the bandwagon into overdrive.
Capital poured into the cryptocurrency market cap at incredible rates, particularly into the DeFi sector. Ethereum-based tokens fueling the future of decentralized finance applications such as lending, borrowing, yield farming, and more lifted the market from depths of Black Thursday.
Related Reading | Yearn.Finance (YFI) Could Fall To $15K “If” Bitcoin Brings Down Crypto
Along the way, Yearn.Finance exploded onto the scene, and thanks to an extremely limited 30,000 token supply, the outrageously volatile asset quickly ballooned to over $40,000 in value, making it at one point four times the value per Bitcoin.
YFI was for a while holding support, and analysts had claimed that as long as Bitcoin and other crypto assets played nice, Yearn.Finance would hold too.
But Bitcoin plummeted at the news of BitMEX’s run in with the CFTC, and YFI has now lost the neckline of a massive head and shoulders pattern, that could send the token tumbling back down to early valuations just after launch.
YFIUSDT 4H Price Chart Head And Shoulders With Neckline Throwback and Retest | Source: TradingView
Yearn.Finance Could Retest $10,000, Just Like Bitcoin
From the top of the structure to the bottom of the neckline was a 50% fall, dropping from over $40,000 to just over $20,000. According to the measure rule, the target of the formation would take Yearn.Finance back to $10,000 or potentially lower.
Head and shoulders are bearish reversal patterns that arrive at the top of an uptrend. And although YFI’s uptrend was extremely short-lived, prices grew to astronomical levels quickly.
Related Reading | Yearn.Finance (YFI) Flies 15% Percent From Local Price Floor, Fractal Targets $60K+
And now that risk and fear have returned to the cryptocurrency market, YFI valuations are coming back down to reality.
However, there’s always a chance that YFI reclaims the neckline, and tries for higher. If that happens, a fractal that could send the asset to $60,000 could be back on, and a fall to Bitcoin comparable prices will be narrowly avoided by just a neck.
Featured image from Deposit Photos, Charts from TradingView
This post was originally published on www.newsbtc.com