The bloodbath for decentralized finance [DeFi] tokens is far from over. One of the worst-hit tokens has been popular yield farming protocol, Yearn Finance’s YFI. It has undergone a strong retracement and over the past week, YFI was down by 12.84%.
The governance token recently took a plunge to $10,000, this level was last seen in the month of August. On the brighter side, the stint was short-lived as it bounced back to its press time price of $11,164. This could signal that YFI’s price has bottomed out at this level in anticipation of a much-needed uptrend.
Hints of Reversal in the Offing
A bullish divergence was also noted by the blockchain intelligence platform, Santiment. According to its latest findings, five whales holding between 1,000 and 10,000 YFI made an entry to the network this week. While the foray of the small number of these large investors may look inconsequential, however, the impact should not be underestimated, primarily because these large holders move a massive volume of coins. And if the addresses holding large amounts of the token continue to increase, a much-anticipated price breakout could, in fact, materialize.
Another good sign was a noticeable uptick in terms of active address, Santiment noted. There was a spike in the figures for deposits which hinted towards a potential case of network growth and hence, a possible recovery in the near term. According to the above chart, the figures for addresses climbed up from near-zero on the 20th of October to over 1,620, ten days later.
Coingape had previously reported that more than 86% of the addresses with a balance in YFI at the current price level were out of the money. This essentially meant that the holders are at a loss and 86% of holders would make a loss if they were to sell the position. However, the latest chart depicted a reversal [of sorts] in the coming days. Santiment summed up,
“YFI is looking interesting for a slight bounce back. Holders selling after YFI dropped below 12K, feeling a little bit of pain. In the meanwhile the active addresses are growing. And have been growing for few days.”