This Defi Altcoin Dropped Over 40%! What's The Reason?

Posted on November 20, 2023 1:11 AM
Cryipto News
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Yearn.Finance's governance token, YFI, experienced a significant surge of around 170% in early November, but on November 18, it saw a drop of over 43% within just five hours. This sudden decline led to speculations about a potential exit scam.

According to CoinMarketCap data, during this drop, the asset lost $300 million in market value. The asset is currently trading at $9,149, significantly lower than its recent price of $14,185. The token's performance data for the last 30 days still indicates an overall increase of 83%.

These sales created an atmosphere of fear, uncertainty, and doubt (FUD) within the community. Some users claimed that 50% of the token's supply is held in 10 wallets controlled by developers. Etherscan data suggested that some of these wallet owners might be crypto exchanges.

Additionally, some X users are considering the possibility that opening short positions may have triggered the movement. Data from Coinglass indicates a spike in open positions for YFI. This suggests that investors opened short positions on YFI following the rise in November.

One trader stated, "I bought the dip... Maybe someone sold 1000 tokens, and that's why the drop happened. We'll see."

Another user mentioned that this doesn't seem like a rug pull.

"It doesn't look like a rug pull at all. Because the asset is still holding steady around $9,000, which is more than 80% above its bottom point."

Yearn.Finance is a decentralized protocol providing automated trading solutions for DeFi markets. The project was initiated by Ethereum developer Andre Cronje in July 2020.