Yearn.finance’s YFI governance token has been caught within a consolidation phase as Bitcoin, and the rest of the crypto market, also see some short-term sideways trading.
This lack of momentum has come about due to the DeFi sector’s stagnating growth, with investors largely sitting on the sidelines while they wait for capital to rotate out of lower-risk assets like Bitcoin and into the high beta DeFi markets.
Until traders and investors alike grow confident that upside is imminent for the aggregated crypto market, there’s a strong possibility that higher risk fractions of the market will continue struggling.
This could prove to be bearish for Yearn.finance’s YFI, as it has seen stagnating growth as of late due to a combination of a disengaged and embattled community, low yields on their various vaults, as well as a weak technical situation.
The confluence of these factors could continue hampering its technical prospects in the days and weeks ahead.
That being said, one analyst is noting that there’s one level that could soon be broken above that may allow YFI to “stretch its wings” and rally higher.
Yearn.finance’s YFI Struggles to Match Gains Seen by Bitcoin and Ethereum
At the time of writing, Yearn.finance’s token is trading down over 6% at its current price of $13,440.
This is around the price at which it has been consolidating for the past couple of weeks, with bulls facing massive inflows of selling pressure