Can YFI’s Current Rally Sustain?

The past 24 hours have brought some comfort to investors, including YFI holders. While yesterday’s rebound is certainly a good sign, the increased volatility could be a cause for concern going forward.

YFI breaks out of the $20,000 zone

After being valued higher than Bitcoin, YFI marked its ATH at $82,958 in May, but its journey since has been nothing but pain for YFI investors.

As YFI started to decline, it fell to the $19,500 region in December before quickly rebounding 87.69% in 4 days. However, January and February wiped out the recovery as the altcoin slipped back below the $20,000 region and barely sustained the $18,500 support.

Nonetheless, YFI holders were elated after the price rose 11.09% yesterday.


YFI Price Chart | Source: TradingView

Before the crash began, more than 92% of YFI investors were making a profit. But that changed quickly, and today, nine months later, only 11% of investors are profitable. In fact, 87% of the 41,400 YFI holders are currently losing money.


Number of YFI Investors Losing Money | Source: IntoTheBlock

The constant price decline caused the average balance of each address in the network to drop from $84,900 to $16,700. The number of investors is also showing signs of a similar decline.

Although whales dominate 54% of the token supply, YFI has a large percentage of loyal investors. HODLers (Long Term Holders) on the network make up a quarter of the total number of investors and hold nearly 6,000 YFI.


YFI Supply Allocation | Source: Intotheblock

These investors are playing a large role in the sustained price recovery/uplift that is much needed for this coin.

Due to the volatility and growing correlation with Bitcoin, YFI is very vulnerable to a price drop. However, looking at the price indicators, bullish momentum appears to be forming.

The Parabolic SAR is showing an uptrend and the Relative Strength Index (RSI) is back near the neutral zone, both showing positive signals.

However, the market has been very unpredictable in recent days. Because of this, new investors must do their due diligence before entering the market, rather than solely relying on price action to buy into YFI.

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