June 25, 2021

Yearn Could Steal DeFi Spotlight From Aave, Uniswap

5 min read

Uniswap and Aave have delighted in a remarkable uptrend over the past couple of days, rising by more than 70% in market value. Nevertheless, these DeFi tokens seem to have reached a fatigue point while Yearn Finance looks primed to catch up with the bull run.

Uniswap Takes the Lead in DeFi’s Correction

Uniswap has actually been on a roll lately as its token price escalated by over 70% in the previous 3 days. UNI went from opening at a low of $7.60 on Jan. 22 to reach a brand-new all-time high of $13.30 recently.

In spite of the enormous gains incurred by UNI within such a brief period, the Tom Demark (TD) Sequential indication recommends that the cryptocurrency is hovering at overbought area. That metric presents a sell signal on UNI’s 9-hour chart.

The bearish formation established as a green 9 candlestick, anticipating a one to four 9-hour candlesticks correction or the beginning of a brand-new downward countdown.

A spike in selling pressure behind Uniswap may assist validate the cynical outlook, regardless of the existing uptrend’s strength.

Uniswap US dollar price chart
UNI/USD on TradingView A glimpse at UNI’s 9-hour chart reveals

that the TD setup has been incredibly accurate at expecting regional tops in its pattern. The last two times that this technical index presented a sell signal within this timeframe over the previous month, a high correction followed. Following a 55%rally between late Jan. 15 and Jan. 18, UNI took a 27%nosedive that was completely timed by the TD Sequential.

Uniswap US dollar price chart
For that reason, the current downhearted

projection should be considered although Uniswap is still in price discovery mode. UNI/USD on TradingView If sell orders pile up around the current rate levels pushing UNI listed below the$11 assistance level, a steeper decrease will likely occur. On its method down, the UNI token might find support around the 50%or 38.20%Fibonacci retracement level. These critical interest areas sit at$10.20 and$9.40, respectively. UNI/USD on TradingView It is worth noting that if Uniswap slices through the overhead resistance barrier at$12 instead, the bearish outlook will be compromised. If this were to take place, this altcoin might re-test its recent all-time high of $13.30 and possibly move towards$15. Aave Aims for a Steep Decline Aave looks technically similar to Uniswap. Its cost has risen by more than 80 %because Jan. 22, going from a low of $160 on Jan. 22 to hit a brand-new record high of$290 recently. Provided its high

correlation with UNI token, the AAVE token likewise seems primed for a high correction. The TD Sequential flashed a sell signal in the kind of a green 9 candlestick on AAVE’s 3-day

chart. If sell orders start to pile up, the bearish development would likely be validated, causing

a one to four 3-day candlesticks retracement prior to the uptrend resumes. AAVE/USD on TradingView Based on historic data, the TD setup has been exceptionally accurate at anticipating significant pullbacks ahead of AAVE. It even provided a sell signal in late August 2020, prior to this altcoin saw its cost plunge by almost 73%. Comparable market habits has happened over the previous year as all the sell signals presented by this technical index within the 3-day chart have actually been verified. For this reason, it appears sensible to take a precautionary method when trading this cryptocurrency at the present rate levels. AAVE/USD on TradingView If a sell-off like the one seen in late August 2020 were to take place today, AAVE’s market value would crash towards$90. However for this to take place, it must initially slice through 3 considerable support areas based on the Fibonacci retracement indicator. These vital price hurdles sit at$200,$160, and$130, respectively.

AAVE/USD on TradingView Nevertheless, a spike in buy orders around the existing cost levels could be strong enough to press Aave above its recent high of$300. Under such circumstances, the downhearted thesis will be jeopardized, and this cryptocurrency will rise towards$500 or higher. Yearn Attempts to Steal the Spotlight While Uniswap and Aave have posted massive gains over the past couple of days, Yearn Finance has actually remained dormant, awaiting a spike in demand. This altcoin has only risen by roughly 29% considering that Jan. 22, while the other two coins removed. However if YFI were to experience a comparable cost action as UNI and AAVE, its market value would surge towards$50,000. AAVE/USD, UNI/USD, YFI/USD on TradingView As speculation mounts around Yearn Finance’s upside capacity, big financiers appear to be including more tokens to their portfolios. Santiment’s holder distribution chart reveals that since the beginning of the month, the purchasing pressure behind this cryptocurrency has been increasing gradually. The behavioral analytics firm tape-recorded a significant spike in the number of YFI whales on the network. Indeed, the variety of addresses holding 100 to 1,000 YFI soared by 8.30%ever since. Roughly three new whales have joined the network in such a short duration. The current increase in large financiers behind Yearn Finance might appear insignificant at first look. But when thinking about that these whales hold in between$3.2 million and$32 million in YFI, the sudden spike in purchasing pressure can equate into countless dollars. YFI Holders Distribution by Santiment Still, Yearn Finance faces a massive resistance barrier ahead that it need to get rid of to advance even more. Based on IntoTheBlock’s In/Out of the cash Around Price (IOMAP)model, more than 820 addresses had formerly purchased nearly 4,000 YFI around$33,000. Just a day-to-day candlestick close above this supply wall will add credence to the positive outlook. In/Out of the Money Around Price by IntoTheBlock

On the flip side, the IOMAP friends reveal that Yearn Finance sits on top of stable support. Over 600 addresses are holding approximately 4,200 YFI at $30,000.

This substantial area of need might have the strength to top the altcoin’s drawback potential as holders will likely do anything to prevent seeing their financial investments go into the red.

The DeFi Market Moves Forward

While Bitcoin appears to have entered a new corrective duration, the DeFi market is booming.

Altcoins like Uniswap and Aave have taken the lead in the current run-up as more capital streams into them. On-chain data from DeFi Pulse reveals that the total value locked (TVL) in UNI is approaching $4 billion while AAVE recently exceeded the $3 billion mark.

On the other hand, Yearn Finance has experienced a 30% growth in TVL year-to-date, which might quickly manifest in its market price.

Time will tell whether the assistance levels of each cryptocurrency will hold, and whether prices will advance even more.

Disclosure: At the time of composing, this author held Bitcoin and Ethereum.