16:23Here’s Why Yearn.Finance (YFI) Remains Long-Term Bullish After 35% Drop
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.
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.
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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:
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.
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