Yearn Finance (YFI) is approaching its all-time high at $ 43,500, a level that has not been tested since September 2020.
However, there are also short-term signs of weakness that suggest a correction may occur before another breakout attempt.
Yearn Finance is approaching all-time high price
YFI has been following a descending resistance line since it hit an all-time high of $ 43,966 on September 12, 2020. After three unsuccessful attempts, YFI managed to reach a local peak of $ 39,939 on January 7th.
After confirming the line as support, YFI reclaimed the $ 28,000 area, confirmed it as support and is heading up. It is currently approaching the all-time high resistance area of $ 42,500.
Technical indicators are relatively up. Both the MACD and Stochastic oscillator are rising, but the daily RSI has formed a bearish trend which could start a correction.
Therefore, it is necessary to look at lower time frames to better determine the direction of the next move.
Potential Double Hill
The six-hour chart shows a potential double top pattern around $ 38,000. Similar to the daily timeline chart, the double peak combined with the RSI and the bearish trend in the MACD.
YFI is also following an ascending support line, currently $ 34,000. While a drop towards this support line seems likely, a break could return YFI to the 0.618 Fib retracement level at $ 28,000.
While a drop towards the support line is likely, we still cannot determine whether YFI will break from the support line or return.
YFI Ascending Support
YFI Wave Count
Cryptocurrency trader @TheEWguy outlined a YFI chart showing YFI at wave 4 and another expected height.
While YFI has already reached a new local peak, the movement from the bottoms does not seem impulsive. Hence, YFI is still possible in wave 4 (shown in orange below), which takes the triangular shape. This will also fit the possible drop caused by the double crown.
While the preliminary target remains at $ 43,500, a more accurate forecast can be given when the 4th wave is complete.
The bottom wave number of the triangle is shown in black.
While Yearn Finance (YFI) is expected to make another attempt to reach an all-time high, a short-term decline is expected before the uptrend continues.