In a sudden and dramatic downturn, Yearn.finance (YFI) experienced a staggering 45% drop within a few hours, leaving the cryptocurrency community reeling and raising concerns about the broader DeFi landscape. The plunge saw YFI’s valuation plummet from a notable $14,500 to a mere $8,916, marking one of the most significant pullbacks for the DeFi giant.
Through Wu Blockchain, renowned crypto journalist Colin Wu revealed startling insights from Coinglass data. He disclosed that YFI experienced a whopping $5 million in liquidation within 24 hours, leading to a peak of $162 million in contract positions. Yet, YFI positions on key platforms have taken a nosedive. Moreover, there has been a substantial surge in YFI open interest (OI), signaling a surge in short positions taken by traders.
According to Coinglass data, in the past 24 hours, YFI, the Yearn token, plummeted by more than 35%, and more than $4.7 million were liquidated. YFI contract positions once reached as high as 160 million U.S. dollars today. Currently, YFI positions on major platforms have dropped…
— Wu Blockchain (@WuBlockchain) November 18, 2023
The abrupt reversal sent shockwaves to investors, with YFI rapidly losing nearly 50% of its valuation, nullifying the bulk of its recent upswing. At the outset of November, YFI had soared remarkably, hitting a pinnacle of $15,591 before swiftly plunging to $8,421 within a single day. This unexpected swing resulted in the disappearance of over $250 million in market capitalization, plummeting from $525 million to $275 million, significantly denting investor trust in the coin’s resilience.
The broader crypto market has also grappled with intense pressure, witnessing a significant selloff. Bitcoin has been slowly recovering dominance while major altcoins like ETH, XRP, SOL, and ADA, among others, took a hit, dropping nearly 3% in the last 24 hours. DeFi tokens, in particular, dragged down the global market cap, which experienced a substantial decline of almost $25 billion over just two days.
The recent surge in crypto prices, primarily attributed to the anticipation around the ETF approval, created a bullish market sentiment leading up to November 17. However, the SEC’s clear indication of delaying the decision has deflated expectations, hinting that the awaited approval might materialize in January 2024. This delay has prompted investors to consider profit-taking measures, potentially triggering a widespread correction across the market.
