• Yearn Finance price hit an all-time high amid news about a potential Grayscale investment vehicle in the U.S.
  • YFI is currently testing a significant resistance level defined by an ascending channel’s upper trendline. 
  • A decisive close above the channel projects a target of $100,000 for this cryptocurrency.

Yearn Finance price came close to $50,000 after rising 26% in the last 24 hours. The upswing was fueled by speculation around Grayscale launching a dedicated YFI Trust. If buy orders continue piling up, this cryptocurrency could surge by more than 100%.

Yearn Finance price hits new all-time highs amid “Grayscale Effect”

Cryptocurrency asset management firm Grayscale has been active as of late especially with its corporate registration filings of multiple cryptocurrencies in the State of Delaware. On February 11, the investment company reportedly registered a new Yearn Finance Trust.

The recent filing does not necessarily mean that Grayscale will list this investment vehicle. Regardless, the news was well-received by market participants who rushed to exchanges to get a piece of the governance token. The spike in buying pressure pushed YFI price by more than 30% to make a new all-time high of $48,230. 

Since Grayscale is an institutional-focused investment company, its asset listings can be interpreted as a proxy to institutional demand. Indeed, there seems to be a clear link between a cryptocurrency’s price rise and demand for Grayscale’s financial products. 

For example, Grayscale currently holds around 56 million Stellar Lumens tokens. This represents a 107% increase since January 1. Interestingly enough, XLM price has risen by a whopping 370% within this period. 

Grayscale XLM holdings chart

Grayscale XLM holdings chart

Given the positive effect that a Grayscale listing can have on prices, Yearn Finance could benefit from a spike in institutional demand.

YFI bulls target $100,000

If this buying pressure continues mounting behind YFI, it could lead to a breakout of an ascending parallel channel where prices have been contained over the past 100 days. A 1-day candlestick close above the recent high of $48,230 would signal the end of the consolidation period and the beginning of a new price discovery phase. 

Indeed, the ascending parallel channel forecasts that by breaking through the upper trendline  Yearn Finance price could quickly double and hit a target of  $100,000 shortly. 

YFI/USDT 1-day chart

YFI/USDT 1-day chart

According to Santiment, Yearn Finance’s social volume adds credence to the bullish outlook. The chatter around this altcoin fell to its lowest levels since it launched despite the steady uptrend it has gone through in the last three months. 

Such market behavior can be seen as a positive sign, from a counter sentiment perspective. 

This lack of interest is generally good especially when the project is consistently building as observed by the high dev activity. There's probably something coming up but the crowd is probably not aware of and it's good that they are not in yet.

YFI Social Volume and Development Activity

YFI Social Volume and Development Activity

Regardless of the optimistic outlook, investors must remain cautious as Yearn Finance price has been rejected twice by the ascending channel’s upper trendline. Failing to slice through the $48,230 resistance level could trigger a sell-off leading to a steep correction towards the channel’s middle or lower trendline.

These support levels sit at $36,000 and $29,000, respectively.

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