Yearn.finance (YFI) underwent a strong bounce on Friday after the : Here’s Why Ethereum’s DeFi Market May Be Near A Bottom
Yearn.finance Drops Toward $10,000
YFI currently trades for $10,500, down over 10% from the local highs of $11,900.
Market data suggests that this continued sell-off is a byproduct of futures short selling. Mechanism Capital’s Andrew Kang shared the tweet seen below on October 30th, noting that YFI’s recent downward price action has been predicated on the open interest of Binance’s YFI futures market rising. This indicates that investors may be increasingly shorting the asset, resulting in downward price action.
There were also a number of transactions spotted by investors where early YFI adopters deposited large sums of the cryptocurrency into Binance. It is believed that those coins were sold for fiat, resulting in some of the downward price action we are seeing now.
OI on $YFI at new ATHs, surpassing first capitulation at 12k earlier this month
12k-15k liquidity capitulated into high volume at 10ks (same as first capitulation into 12ks
Sell side orderbooks thin
What happens to shorts on a bounce up? pic.twitter.com/Bc03Vhm2Cn
— Andrew Kang (@Rewkang) October 30, 2020
The drop in the price of the Yearn.finance Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin
Expect Altcoins to Underperform?
While YFI may have fundamentals going for it, they may not be enough to stop the cryptocurrency from underperforming relative to Bitcoin.
Su Zhu, CIO and CEO of Three Arrows Capital, recently stated that Bitcoin rallying rapidly will automatically compress
