YFI trouble looms below the $12 price point as more traders are choosing not to purchase the coin after it went below $12,000 according to an analyst. He warned that the coin could drop by about 65% soon so let’s read more in our altcoin news today.
The analyst said in a tweet that the Yearn Finance’s native token is dead if it doesn’t manage to hold above the support level. In another tweet, he published an outlook showing that YFI tried to stay afloat inside a price floor zone. The image shows YFI is in a medium-term downtrend which started after the token established a record high close to $44,000 and lately showed signs of bottoming out after the price reached $12,220. In the meantime, most of the fundamental and technical factors contributed to the sharp slide as the token rallied too fast amid the craze for decentralized finance projects. It also demanded a natural correction on profit-taking sentiment.
1/ A timeline of events in the EMN scandal
— EMN Investigation (@EMNInvestig) October 10, 2020
No matter, the pair kept forming lower lows as liquidity increased the prices up and dried the upper crypto brass. For instance, the period of the pair’s downside correction coincided with a drop in the BTC and ETH market. These top cryptocurrencies dropped because of the delay in the second coronavirus stimulus package in the United States. The stimulus would have brought about $1.6 trillion into the economy so it would eventually hurt the US dollar and raise the demand for even riskier assets.
What fueled the YFI bearish momentum is Andre Cronje, the founder of the project who launched a series of new smart contracts for his upcoming gaming project named Eminence Finance. The association of Cronje with the new game startup got the traders really excited. They expected to make healthy returns from the project so they chose to deploy capital into the smart contracts but only to find later that all these contracts had a bug.
The small error deleted about $15 million worth of stablecoins but to offset the losses, Eminence Investors sold the coins en masse which brought the price further lower below the $20K. Now everyone who suffered major losses, planning on suing Mr. Cronje for deploying faulty smart contracts as the claims remain unfound. The low fundamental outlook for the token is leaving technical analysts bearish as well.
The trader noted that YFI has a slight possibility to hit $10,000 during the last quarter noting that it could happen next week as the YFI trouble looms:
“The $YFI Chart has been beautiful. Unfortunately, the bear trend seems like it will sustain for another week or so, a historically weak bounce than previous bottoms. I would not be surprised to see sub 10k in Q4.”
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