A textbook bull indicator saw Yearn.Finance hitting the $30,000 price range as the governance token dropped on Wednesday with traders securing their short-term profits from the recent rally as we are reading more in the latest altcoin news.
The YFI/USD exchange rate dropped to 4.34 percent at $22,915 after the 47-day high close to the $25,000. The drop came as a part of the downside correction as it appears that every textbook bull indicator is in the uptrend. YFI later found support close to the $20,000 reflecting on the inclination of the traders to go on with the bull run. The stronger buying demand for YFI surfaced after its parent protocol Yearn.Finance implemented a new improvement proposal as with the YIP 54-upgrade which introduced a so-called Operations Fund to purchase back YFI or other assets with discretion. The traders that the latest upgrade will boost the YFI utility with investor Jason Choi praising the intention of YFI to allocate the token to support security audits, bug bounties, grants, and security as well as pay wages to the Yearn.Finance contributors:
“[YIP-54] is a better model than buy and burn,” said angel investor Jason Choi. “It 1) introduces actual buy demand for token and ties [the] value of the platform to value of the token, and 2) creates skin in the game for contributors as part of op funds will be in native token now.”
In the past 4 months, Yearn vaults earned ~$3.4M in fees.
Part of this may now be used to conduct actual buybacks (not just burning supply) to reward contributors 👀https://t.co/DbyLTRJADC
— Jason Choi (@mrjasonchoi) November 15, 2020
Another analyst explained:
“Instead of the old, complex model of anything over $500k+ going to stakers, now 50% of the protocol income goes to ops. Even more exciting, this allows Yearn-ops the ability to purchase YFI on the open market to give to devs/strategists!”
YFI aims to move bullish because of the supportive technical setup which is expected to send the token back to $30,000. As shown in the charts, the YFI/USD exchange rate fell from the Falling Wedge range which is a bullish reversal pattern that appears when the asset’s price trends lower between the two converging trendlines. The price breaks out of the upside, rising as far as the distance between the two trendlines. YFI fits almost all criteria from the Falling Wedge pattern since it is on the edge of hitting the upside target which is set at $23,380 above the point of breakout.
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