The popular DeFi token, YFI, rose 23 percent overnight and may have gotten into a bull trap, according to the analyst.
Yearn Finance's governance token dropped 10 percent from $ 36,043 this Friday. The decline typically occurred as a result of the correction that followed price rallies. Investors worriedly took YFI from the low level, but then sold at a rather high level.
While the pump and dump were purely technical, the rise in the YFI price remained solid, according to NewsBTC writer Yashu Gola. COINBASE Pro, one of the world's leading cryptocurrency exchanges, announced on Thursday that it will list YFI trading pairs on its platform starting next week.
The platform stated that they will begin accepting YFI transfers on Monday, September 14th. If liquidity conditions are met, trading in Turkey on Tuesday September 15 clock 19 will begin at 00.
In response, the DeFi token jumped from $ 29,000 to $ 35,000 in just a few hours. Listing on Coinbase Pro often leads cryptocurrencies to experience a huge rise. This is because the platform opens the YFI to a market with better fiat liquidity that includes seamless conversions between tokens such as the US dollar, euro, and pound, and national currencies.
A listing on Coinbase almost confirms that cryptocurrencies are real in the eyes of US traders. This serves as a huge plus for newly released tokens such as YFI, which have limited access to the mainstream financial market.
Technical view at YFI
YFI / USD was testing $ 31,993 as support and $ 35,070 as resistance, according to NewsBTC writer Gola. The pair indicates it will be consolidating horizontally at this $ 4,000 range for the time being. Meanwhile, listing expectations on Coinbase could help YFI stay above the support level.
According to the author, this could allow traders to open long positions at $ 35,000 for short-term profit, which could allow them to maintain a stop loss target below the entry point. Meanwhile, a successful break above $ 35,000 could extend the upward target to $ 38,990 (~ $ 40,000).
On the other hand, according to NewsBTC author, if the negative sentiment continues in the cryptocurrency market, traders can use their gains in the YFI market to offset losses elsewhere. This means an extended correction below the $ 35,000 support.
In such a case, traders' first downside target could be watched at $ 29,831. If there is more decline than Yashu Gola, traders can extend their short positions towards the green zone in the chart above.
