Bitcoin and Yearn Finance shared an interesting correlation in the 2nd week of May in 2021. While Bitcoin was retracing after reaching $60,000 in the market, The DeFi token reached a whopping price value of $95000. A week after, Bitcoin witnessed its largest correction of the year, collapsing down to $30,000. YFI followed suit but it can be argued there was an immense liquidity pull from the token due to BTC’s flash crash.
The point being made here is that YFI was worth more than Bitcoin at one moment time in the chart, so there is always a possibility that it might retrace back to that value when the macro-market turns bullish. At press time, YFI is worth under $10,000. In this article, we will analyze if YFI has the potential to rally back to its previous high or not; as the DeFi space improves.
Is Yearn Finance Dead?
At press time, the price of YFI is valued at $9438 and multiple speculations were going on that the project is being left to die. Yearn Finance was one of the 1st DeFi protocols to introduce yield farming but over time other protocols managed to outperform the ecosystem. However, there might be little truth to the fact that developers are leaving the space.
According to a recent Santiment analysis, development activity for the protocol has been on an incline since the end of last year. While the chart above indicates a minor dip in development activity recently, it can be assumed that devs are still building on the projects.
In terms of social sentiment, the network is adhering to a bearish picture. The number of active addresses has also dropped as the coin had to succumb to a collective correction market. Yet the whales might not be done yet.
Whales are buying?
According to data, YFI addresses holding between 100-1000 coins are currently reaching an all-time high since March 2021. This is extremely aggressive from the whales but it can also be speculated that these might be exchange wallets, in which coins will be deposited.
Conclusion
Yearn Finance’s path to $95000 is not clear at the moment. Yet, there is enough data to suggest that the project is still thriving in the ecosystem and there remains a lot of potential for the DeFi project. In terms of activity, the next bullish period will define whether it has positive momentum or not.