{"id":448703,"date":"2020-11-03T11:38:09","date_gmt":"2020-11-03T11:38:09","guid":{"rendered":"https:\/\/wncen.com\/?p=448703"},"modified":"2020-11-03T11:38:09","modified_gmt":"2020-11-03T11:38:09","slug":"3-reasons-why-yearn-finance-yfi-fell-below-10k-recovery-ahead","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/yearnfinance\/3-reasons-why-yearn-finance-yfi-fell-below-10k-recovery-ahead\/","title":{"rendered":"3 Reasons Why Yearn Finance (YFI) Fell Below $10K \u2014 Recovery Ahead?"},"content":{"rendered":"

Yearn Finance’s native token YFI debuted with an explosive price rally<\/a>, surging from zero to over $44,000 in just 45 days of trading. But as hopeful traders anticipated an extended bull run towards $100,000, bearish catalysts pulled the rug under their feet.<\/p>\n

The YFI\/USD exchange rate crashed by almost 78 percent from its all-time high near $44,026. At first, the downside move appeared as a natural price correction that typically follows major upside rallies. Nevertheless, YFI failed to find a concrete support level, showing that traders were in no mood to re-accumulate the token.<\/p>\n

On Tuesday, YFI\/USD fell below $10,000 \u2013 a psychological support level \u2013 for the second time in four days. The latest decline came after an upside rejection around $11,200<\/a>, a resistance level YFI tested repeatedly since October 30.<\/p>\n

Below are three reasons why YFI broke below $10,000, followed by an outlook of its impact on the token’s future price trend.<\/p>\n

#1 Bitcoin Dominance<\/h2>\n

The influence of Bitcoin on its rivaling digital currency projects was visible all across the recent days.<\/p>\n

The flagship cryptocurrency’s market dominance increased from 57.52 percent on October 21 to 64.66 percent on November 3. It suggested a higher capital migration from altcoins to the Bitcoin market, especially as the latter’s adoption boomed among significant corporations as a hedging asset and payment firms (read PayPal<\/a>) as<\/em> a mode of payment.<\/p>\n

\"bitcoin<\/a><\/p>\n

Bitcoin Dominance trends upward on Bitcoin's growing adoption curve. Source: BTC.D on TradingView.com<\/a><\/pre>\n
The entire altcoin market succumbed to Bitcoin’s relentless growth. The bearish bias also engulfed the decentralized finance (DeFi) sector, whose projects were sitting atop triple- to quadral-digit profits on a year-to-date basis.<\/p>\n
At a 1,200 percent profit, YFI became a perfect scapegoat for traders looking to lock-in their short-term gains\u00a0to move the proceeds later to the Bitcoin market. Even on Tuesday, YFI’s slip below $10,000 came on the backs of a stable Bitcoin, which was trading more than 1 percent higher on a 24-hour adjusted timeframe as of 11:00 UTC.<\/p>\n
#2 Lack of Leadership<\/h2>\n
Under the leadership of Andre Cronje, who amassed a strong fan-following for himself after releasing back-to-back yield farming projects, Yearn Finance emerged as the DeFi sector’s unicorn project.<\/p>\n
Research and analysis firm Messari called<\/a> Mr. Cronje an “enigmatic founder,” later adding that his leadership prompted Yearn Finance “to grow from a simple yield aggregator into a comprehensive DeFi ecosystem.”<\/p>\n
The reasons were out in open. Months after its launch, Yearn Finance has introduced a series of additional services. They included products focusing on\u00a0insurance, venture financing, decentralized exchange, lending, and stablecoin. That promised to grow YFI’s adoption further.<\/p>\n
But things turned haywire after Eminence, a project Mr. Cronje launched away from the Yearn Finance. It was not a public launch but was available online for Mr. Cronje’s own preference for testing products in real-time. Unfortunately, his fans did not look at Eminence that way.<\/p>\n
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1\/ A timeline of events in the EMN scandal<\/p>\n
Andre Cronje, founder of Yearn Finance, hyped a surprise launch.$emn<\/a> $yfi<\/a> pic.twitter.com\/qsGhLOrZIw<\/a><\/p>\n
— EMN Investigation (@EMNInvestig) October 10, 2020<\/a><\/p><\/blockquote>\n