YFI/USD and LEND/USD are 46% and 50% below their August peak prices.
DeFi tokens continue to decline as the crypto market enters a correction phase. According to CoinMarketCap rankings, all of the top 10 decentralized finance tokens are trading lower today, extending a recent downtrend that has persisted over the past several days.
These losses have also reduced the total value locked (TVL) in decentralized finance protocols and smart contracts. Data from DeFi Pulse shows TVL falling from a peak near $13.2 billion to roughly $9.38 billion as of September 22.
Over recent months, yield farming and liquidity tokens attracted strong interest from traders, with many posting large rallies and reaching consecutive all-time highs. While these sectors still maintain a growing user base, the short-term outlook suggests many tokens could experience further declines.
Some tokens have already dropped to levels that are nearly half their recent all-time highs.
Yearn.finance
YFI/USD surged to about $43,000 on September 12, delivering massive percentage gains. Over the past seven days, however, the token plunged to lows near $20,000, representing an approximate 46% decline from its peak.
The Ethereum-based token is up 3.4% in the last 24 hours but remains down on the weekly chart as prices attempt to move back toward $25,000. Chart patterns suggest YFI/USD may be setting up for a breakout from a falling wedge. There is a hidden bullish divergence on the MACD, and the RSI is beginning to recover from oversold levels. If buyers maintain control on the 4-hour timeframe, a short-term move toward $30,000 could be feasible.
Aave
Aave (LEND) is down about 10% on the day and roughly 29.8% over the last seven days. After rallying to highs of $0.92 in August, the token has suffered a sharp reversal.
Having struggled near the $1.00 area, LEND/USD has fallen to lows around $0.46, shedding nearly 50% of its value from its recent peak.
Technically, bears appear to have the short-term advantage. The daily MACD is drifting lower, and any upside momentum may face resistance at the 20-day and 50-day moving averages. If a bullish breakout occurs, LEND/USD bulls could target levels near $0.60.
On the downside, support for bulls lies near the 100-day moving average and around the 23.6% Fibonacci retracement level on the pullback to $0.44 from the $0.90 high.