Timing when to buy in crypto or any market is a difficult task. Eager DeFi investors learned this the hard way if they rushed to buy Yearn.Finance (YFI) the moment it was listed on Coinbase. From that moment on, its been almost nothing but downside since, leaving anyone who bought that “top” with a $25K paper loss on hand.
Will YFI recover and soften the sting of such a dramatic fall from grace, or will investors continue to yearn for their money back?
How A Coinbase Listing Has Become The Crypto Industry Kiss Of Death
Once upon a time in the cryptocurrency market, a Coinbase listing meant big gains. Even just rumors of a potential listing sent XRP soaring in early 2018 from $1 to more than $3.50 at its peak.
Related Reading | Yearn.Finance (YFI) On “Life Alert” After Weak Attempt To Hold Support
These days, it is more like a kiss of death than getting a spin on the wheel of fortune. Take Yearn.Finance for example. From the moment the digitally scarce DeFi token made its debut on the exchange, its fallen 65% or more high to low.
YFIUSD Daily Coinbase Death Spiral | Source: TradingView
The nasty-looking chart above is the Yearn.Finance YFIUSD daily chart from Coinbase, showing how devastating the descent has been for anyone who bought just 23 days earlier. Any investors who bought one of the 30,000 YFI tokens to ever exist are now out a full $25K or more at the time of this writing.
Yearn.Finance (YFI) Head And Shoulders Target Lies Deeper Below
The Coinbase chart, however, is only just part of the story. Switching to the charts of platforms where the token was listed for much longer, shows the rest.
Related Reading | DeFi Token Yearn.Finance (YFI) Breaks Massive Pattern Neckline, What’s Next?
From the moment the DeFi token made its debut on Coinbase, began the “head” in a head and shoulders chart formation on YFIUSD charts. The bounce you can see above formed the right shoulder and led to a breakdown of the neckline from such strong downward momentum.
YFIUSDT Daily Head And Shoulders Reversal Pattern | Source: TradingView
YFIUSD has fallen a full 65% from the peak of the reversal pattern, with a target closer to the cost of just one BTC. At its peak, it was worth over four times the price per Bitcoin.
It isn’t clear why a listing on Coinbase led to such fallout in an asset that had seen nothing but upside, but perhaps adding another fiat gateway created a flood gate for profit-taking.
Eventually, funds will flow back into the low supply DeFi token, easily causing its valuation to increase once again. But as investors learned at the top, timing markets isn’t an easy task.
Buying the bottom of YFI wherever that may be is likely to be a lucrative position, but attempt to knife-catch this runaway train could prove disastrous.