Yearn.finance (YFI) remains in an advantageous position despite its strong correction from local highs, analysts say.
Like Bitcoin, Ethereum, and other top digital assets, YFI has faced a strong retracement over recent days as legacy markets have been crushed by a rising dollar. The decentralized finance coin has been hit especially hard, actually.
Check out the chart below, which shows that the Ethereum-based coin has faced a steep correction over recent days after peaking just shy of $40,000.
Chart of YFI's price action over the past few weeks from TradingView.com
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YFI Has Room to Grow
YFI has room to grow after its strong downtrend, analysts say.
Santiment, a blockchain analytics firm, shared this tweet below just recently explaining why YFI remains in a positive state from a longer-term perspective. The company noted that users of Aave are depositing YFI into the lending pool, social volume for the cryptocurrency has remained strong, and data suggests vast accumulation is taking place with the coin.
1) $YFI hit an all-time high of $38,404 as we crossed into September. Since first being covered in our previous article (https://t.co/WRzQBmsZp6), it is a cool +1,483%. Our latest covers:
— Santiment (@santimentfeed) September 2, 2020
All these trends working in confluence should drive YFI higher in the longer run.
Along with this, the underlying Yearn.finance protocol has continued to collect a vast and increasing amount of fees, which should allow YFI to accrue value in the long run.
Related Reading: There’s an “Unusual” Amount of Bitcoin Sellling Pressure From Miners
An Index Play
Although YFI isn’t exclusively linked to all DeFi protocols, many analysts say that the coin is basically a decentralized finance index.
Fortunately, this segment of the crypto is expected to continue growing as capital, both human and financial, continue to enter the space. This bodes well for the Ethereum-based coin, which will likely see further growth as DeFi gains traction.
On why YFI is on the verge of seeing longer-term growth, Andrew Kang, a crypto venture capitalist and DeFi analyst, noted that there are market trends that indicate growth is just starting:
“DeFi has been around for years, but has only recently received serious recognition in the crypto community. But even with the buzz, the levels of understanding, usage, and capital allocation are all still low with high upside potential. **DeFi development** It’s hitting an inflection point. Those that have follow the space know how hard it is to keep up with the new projects even when researching on a full time basis.”
With recent DeFi token price run-ups, people have been crying “bubble!”.
So is it too late to invest or not?
Here are my thoughts on where we are in the state of the DeFi market from an “inside perspective” pic.twitter.com/cDAhpc9tVN
— Andrew Kang (@Rewkang) July 1, 2020
Other investors in the space expect more growth, with many citing the lack of yields that are offered in traditional finance when compared to DeFi. YFI stands to benefit all this, especially if it continues down the path of being a leading yield aggregator.
Related Reading: Here’s Why This Crypto CEO Thinks BTC Soon Hits $15,000
Photo by Ryan Shultis on Unsplash Price tags: yfiusd, yfibtc Charts from TradingView.com Here's Why Yearn.Finance (YFI) Remains Long Bullish After 35% Drop