Yearn Finance’s (YFI) price experienced a significant nosedive, plunging more than 45% to below $9,000 on November. This abrupt decline has raised concerns of potential market manipulation, with allegations coming from various sources, including the dYdX team. At the time of writing, YFI is changing hands just above $9,260 on November
The YFI token’s staggering 45% slump, from its recent highs of $15,548 to lows of $8,918 on Saturday, wiped out all of its gains from the previous week. Notably, YFI/USD had been on an impressive upward trajectory, surging by over 170% over the past month.
YFI market manipulation and liquidation turmoil
Yearn Finance’s sharp price decline unfolded amid a cloud of negative sentiment surrounding allegations of potential market manipulation. Notably, there were substantial deposits made to cryptocurrency exchanges, and on-chain data from the market platform Lookonchain indicated that a significant whale sold YFI tokens as prices plummeted. The dYdX team, a prominent player in the decentralized finance (DeFi) space, highlighted alleged market manipulation and revealed that they had utilized $9 million from their v3 insurance fund to address liquidation gaps in the YFI market.
Antonio Juliano, the founder of dYdX, stated in a post on X, “This was pretty clearly a targeted attack against dYdX, including market manipulation of the entire $YFI market.” These allegations have cast a shadow over the YFI ecosystem and its recent price performance.
The fear, uncertainty, and doubt (FUD) surrounding YFI’s price on November 18 resulted in an increase in liquidations. Data from Coinglass shows that a total of $4.55 million was liquidated within a 24-hour period, with long positions accounting for over $3.07 million of these liquidations. These figures underline the extent of the turmoil that engulfed the YFI market amid the allegations of market manipulation.
YFI’s price surge, correction, and uncertainty
YFI is the governance token of Yearn Finance, a prominent player in the decentralized finance (DeFi) ecosystem. Yearn Finance offers a suite of products, including lending aggregation, yield generation, and insurance, and has established partnerships with some of the top DeFi platforms such as Aave, dYdX, and Compound.
The price of YFI had witnessed a remarkable surge in the weeks leading up to this dramatic price correction. It had reached its recent peak of $15,548, a level not seen since May 2022. Profit-taking may have played a role in the recent downturn, as investors sought to capitalize on the substantial gains.
As of the time of writing, YFI has seen its weekly gains reduced to just over 2%, and its 30-day performance is down to +85%. These numbers underscore the considerable volatility and uncertainty that have gripped the YFI market in recent days.
The Yearn Finance (YFI) ecosystem has experienced a tumultuous period marked by a sharp price decline of over 45% amid allegations of market manipulation. These allegations, coupled with substantial liquidations and increased market turbulence, have cast a shadow over the once-booming DeFi project. As the cryptocurrency community awaits further developments, it remains to be seen how Yearn Finance will navigate these challenging circumstances and whether its governance token, YFI, can recover from the recent setback. Investors and observers will undoubtedly be closely monitoring the situation to gauge the long-term prospects of this influential DeFi player.
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