Yearn Finance Price Surges above $10K, Will YFI Price Sustain this 123% Growth in 2023?

Key Takeaways

• The YFI price has dropped by more than 12% in the past few hours, preparing to validate the bearish reversal after marking the highs around $11,200
• The price is believed to remain consolidated for a while post to which the markets are believed to rebound sparking a fine upswing
• The on-chain metrics are currently are neutral and hence a consolidated trend my continue for sometime 

Yearn Finance, one of the top DeFi tokens that brought the decentralized finance space into the mainstream, is again gaining some strength. The once-expensive token, which was trading above $96,000 during the 2021 bull run, had fallen precipitously below $10,000 during the bear market. But because people’s attention was now focused on other tokens, the YFI price fluctuated more quietly. 

Read More: Ethereum Price Prediction

The YFI price has surged heavily during the first few weeks of 2023 and marked a rally of more than 120% to reach the highs beyond $11,000. It was the time when the platform announced to move into “liquid staking derivatives, where-in the underlying tokens receive staking rewards as part of Ethereum’s PoS network. 

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— yearn (@iearnfinance) February 21, 2023

However, the fall of the crypto-supported bank Silvergate has created a huge amount of turmoil within the markets. Along with the other cryptos, YFI price also dropped from $11,180 to $9733.2 and trying very hard to revoke the bullish trend as the bears continue to mount significant pressure. 

Yearn.Finance Token Technical Overview

Source: Tradingview

• The YFI price has been rising significantly high and reached a peak beyond $11,000 post to which the price flipped and is testing the lower support 
• The price amid the recent pullback dropped beyond the rising parallel channel and flashing the possibility of a bearish breakout as the RSI is also maintaining a descending trend
• The volume also has plunged heavily, largely dominated by the bears that may substantiate the bearish influence over the rally
• The price is expected to hover along the support zone for a while, and spark a rebound, or else drop back toward the lower support around $8655 to attract liquidity back towards the platform

Yearn.Finance Token On-Chain Analysis

Yearn.Finance Supply on Exchanges vs Supply Held by Top Addresses

Source: Santiment

The demand for the project indicates the supply on the exchanges as well as the balance held by the top addresses, usually called whales. The rise and drop in both levels carry their own significance. The rise in the supply on exchanges flashes a bearish outlook, while a rise in the supply held by top exchanges indicates the markets are preparing for giant price action ahead. 

Presently, both the supplies have dropped and are trading flat since the beginning of the year 2023. This indicates that the whales are not accumulating the tokens, while the holders also continue to hold their tokens. Therefore, the traders are bullish on the token’s future rally, while the whales are currently bewildered.

Yearn.Finance Social Dominance

Source: Santiment

The social dominance of a token depends upon the number of messages or posts, the traders carry out with respect to the token. However, the social dominance is calculated with respect to the top 100 crypto tokens according to their market capitalization. If the social dominance rises, then it is considered that the dominance is higher compared to the other tokens within the top 100.

The social dominance of YFI has been heavily slashed, indicating the token is less recognized and talked about in the markets. The dominance slightly rose amid the price rally in the recent past, but remained lower than the required. 

Yearn.Finance Binance Funding Rate

Source: Santiment

The funding rate is the amount of an asset paid between the short and long traders who hold the perpetual contracts. The Binance funding rate comprises two components, the interest rate and the premium. The interest rate is fixed at 0.03% per day with some exception contracts where-in the interest rates are 0. 

If the funding rate is higher, then the traders who are long need to pay for short positions. However, the current funding rate is hovering within negative regions, indicating that the perpetual contract is lower than the market price. Hence the traders who are short on the token price need to pay the longs.

Additional Read: Top Crypto Projects in 2023

Concluding Thought!

Collectively, the Yearn Finance price has been gaining significant traction in recent times while the on-chain parameters are completely not in favor of the bulls. The depleted supply of the top addresses, social dominance and the funding rate indicate bearish outlook. Meanwhile, the drained exchange reserve points towards a possible bullish reversal soon.