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The cryptocurrency industry has seen a lot of progress in the last week, with Bitcoin and Ethereum reaching new all-time peaks. However, it is fair to assume that the digital assets industry is no longer all about the top two cryptos, with DeFi coins like YFI making major gains on the rankings.
YFI’s prices have increased by more than 520 percent in the last six months. Although this seems to be exceedingly positive for the alt, the reality seems to be a different hue of colour. The price increase from over $11,000 in November 2020 to $48,415 at press time has been less than transparent.
YFI, like many other altcoins on the market, has seen its price fluctuate for long periods of time. However, considering the current business situation, is YFI’s current price sustainable, or will history replay itself in the form of yet another short-term price correction?
Surprisingly, data from Santiment revealed that, considering the bullish existence of the YFI industry, there might be a bit of FUD eventually creeping into the market as the price remains close to the $50,000 mark. In such a case, what YFI really wants is a high amount of price support if bearishness is about to reach the market.
Looking at a couple of the primary fundamentals will help you predict where the market will go in the coming weeks. According to Santiment info, YFI availability on exchanges has been sluggish for some time and has not been growing. Although less coins in markets is usually a positive indicator of hodling, in the case of YFI, if one looks at previous precedents, the price downturn started as soon as supply reached a stalemate.
Furthermore, the analytics platform found out that the recent price surge started with the coin’s low on-chain operation. However, a pattern turnaround has arisen in recent weeks, with on-chain operation increasing and the price remaining inversely related to it.
If the market approaches its all-time high, the issue of price discovery arises. At the time of publication, YFI appeared to be missing in this field. According to Santiment info, the coin’s MVRV put it in the trouble zone and prime for a new pattern turnaround, which could result in a short-term price correction.
If a price reversal occurs in the coming days, YFI’s $44k-price level may end up being a crucial support level for the coin. However, if this level is flipped to resistance in the coming weeks, all of YFI’s recent upward momentum and price increase could be reversed.
This will result in YFI’s price following its present cycle, with the coin seeing heavy ‘push and pull’ at frequent intervals.