Following the previous sharp rise in Bitcoin, DeFi tokens have gradually weakened in the past two months, but are now making a comeback. Aave, Uniswap and yEarn Finance are leading the way in terms of revenue.
Aave flashed a sell signal after a surge of 120%
Aave experienced a sharp spike in demand on November 5, and its price soared by more than 120%. This DeFi token rose from a low of $26.4 to a high of $59 in four days. Despite the huge gains made in such a short period of time, the price may be ready to pull back.
Technical indicators once again indicate that Aave is ready to decline. The TD sequence indicator sends a sell signal in the form of nine red candlesticks on the 12-hour chart of AAVE. This bearish pattern estimates that an increase in downward pressure may trigger one to four daily candlestick corrections before the uptrend resumes.
IntoTheBlock’s “In/Out of the Money Around Price”, referred to as the IOMAP model, shows that no significant demand barriers can prevent the loan agreement tokens from falling further. Based on this on-chain indicator, the only significant area of interest lies between US$45.6 and US$42.6, of which approximately 770 addresses have previously purchased 3.15 million AAVEs.
This barrier may be able to absorb some of the recent selling pressure. Holders in this price range may start buying to prevent further deterioration of the price. However, if Aave breaks this layer of support, the price may plummet to $31.6.
On the other hand, the IOMAP model shows that the trading price of the cryptocurrency is below the stable resistance level. Nearly 300 addresses purchased approximately 4.7 million AAVEs between US$55.5 and US$56.2.
Only candlesticks that close above this critical supply level can invalidate the bearish outlook and cause further gains.
Uniswap is at the top of the giant support level
Uniswap seems to have reached the lowest point in the market on November 5, and the chart shows that buying pressure has increased since then. In the past four days, this cryptocurrency has gained more than 68%-but the bullish impulse seems to have been suppressed by the 200 four-hour moving average on the 4-hour chart.
Although the price has successfully tested this key resistance area in the past few days, the price has been rising so far.
IntoTheBlock’s IOMAP shows that approximately 1,800 addresses purchased 6.7 million UNIs at a price of US$2.87 to US$2.95. Therefore, only a surge in demand can the DeFi token convert the 200-four hour moving average into a support level and confirm that the price will rise to $3.3 or higher.
It is worth mentioning that Uniswap is located above a huge supply barrier, which may have the power to prevent bulls from losing control of price action. The IOMAP queue shows that more than 4000 addresses previously purchased 40 million UNIs at a price of 2.4 US dollars.
If a pullback occurs, this support area may absorb some selling pressure to prevent the DeFi token from falling further.
The outlook for yEarn Finance is unclear
After yEarn Finance has soared by nearly 143% in recent days, it seems that it has entered the consolidation period.
The stagnant price movement seems to have led to the formation of a symmetrical triangle in its hourly chart. The downtrend line is formed with the swing high, and the uptrend line is formed with the swing low.
By measuring the distance between the initial high and low of the chart and adding it to the breakout point, the symmetrical triangle suggests a target of 23.5%. The increased buying pressure behind this cryptocurrency may make it trade at approximately $19,000.
Although symmetrical triangles can form a continuous trend, they can also form a reversed upward trend. For this, the DeFi token must break the support trend line at $14,000. IntoTheBlock’s IOMAP shows that at this price level, there are more than 1,000 addresses holding nearly 10,500 YFI.
Although this huge area of interest may cause prices to continue to fall, a break below this area may cause prices to fall by more than 20%, reaching the $11,000 support level.
Symmetrical triangles are ambiguous in direction, which means that traders must wait for confirmation before entering a position. Candlesticks that close above or below the trend line will provide better ideas for the next development of yEarn Finance.
DeFi market rebounds collectively
Although global financial markets have assessed the impact of the potential COVID-19 vaccine, the total value locked in by the DeFi agreement continues to hit a record high. Despite the huge losses incurred in the past two months, the level of interest in this field of encryption shows that it has more space.
Aave, Uniswap and yEarn Finance seem to have reached the lowest point in the market on November 5th-now investors are becoming more and more greedy. In general, these three cryptocurrencies are expected to recover their lost ground and seek higher highs.
Although this seems to be the case, as shown by previous analysis, the data shows that as Bitcoin soars, this segment may undergo several corrections.
Therefore, investors must pay close attention to the different support points mentioned earlier. As long as AAVE, UNI and YFI can remain above their respective demand barriers, the bullish outlook will continue. Otherwise, it may trigger a sell-off, which will shake the weak before the uptrend resumes.
