Select DeFi tokens have outperformed Bitcoin and altcoins as investors cheer the news of mutually beneficial partnerships.
Yearn.finance has been busy announcing a slew of mergers in the past week, and these have the decentralized finance space buzzing once again. Just after the Yearn and Pickle Finance merger, Yearn has announced a partnership with Cream to launch Cream v2.
Some of the key takeaways are that teams from both protocols will merge their development resources and Yearn vault shares can be kept as a collateral to borrow on Cream. Yield farmers might also benefit as Yearn vault strategies will have access to leverage through Cream.
The collaboration has also planned several releases for the future. Cream will launch Stable Credit, the proposed lending platform being built by Yearn and a zero-collateral protocol credit solution is also in the pipeline.
Yearn.finance founder Andre Cronje also announced a merger with SushiSwap on Dec. 1, describing it as “one of the more aggressive synergies.” The core items will be put up for a vote via governance to make it official.
While both tokens and governance will remain separate, each project plans to hold each other’s tokens in their treasuries.
Both teams will merge development resources and their liquidity pools into a single lending pool that will boost the total value locked.
Ultimately, SushiSwap will become the automated market maker of choice for Yearn’s yield farming strategies and Yearn will help create xSushi vaults to farm SUSHI, Ether (ETH), YFI and Wrapped BTC (wBTC).
The news of mergers and aquisitions led to a strong rally in several DeFi tokens, but can they continue their journey higher?
Let’s analyze the charts of the top three movers to find out.
YFI rallied from an intraday low at $18,228.60 on Nov. 26 to an intraday high at $31,780.41 on Dec. 2, a 74% gain within a short period. This shows that the investors have cheered the flurry of fundamental news of the past few days.
Both moving averages are sloping up and the relative strength index (RSI) is close to the overbought territory, which suggests a bullish trend. The YFI/USD pair may rally to the overhead resistance at $34,204.24 where the bears are likely to mount a stiff resistance.
However, if the bulls do not give up much ground or buy the dip to the 20-day exponential moving average ($23,926), it will increase the possibility of a break above the overhead resistance.
On a close above $34,404.24, the next leg of the up-move to the all-time high at $43,966.31 could start. If the bulls can drive the price above this level, the pair could rally to the $50,000 psychological resistance.
This bullish view will be invalidated if the pair turns down from the current levels or the overhead resistance and breaks below the 20-day EMA. In such a case, a few days of range-bound action is possible.
SushiSwap’s SUSHI witnessed a 144% rally from the Nov. 26 intraday low at $0.9758 to the Dec. 2 intraday high at $2.3861. The token has started a new uptrend, as seen from the higher high and higher low formation.
Both moving averages have turned up and the RSI has jumped into the overbought territory. During the initial phases of an uptrend, if the RSI stays above 70, it suggests strong buying interest and is generally considered as a sign of strength.
The first target on the upside is $2.65. The bears may attempt to stall the rally at this level, but if the SUSHI/USD pair stays above the 20-day EMA ($1.50), it will increase the possibility of a break above the resistance.
There are several minor resistance levels between $2.65 and $3.50. These could act as speed breakers resulting in heightened volatility. However, if the bulls can clear the $3.50 resistance, the next target is $5 and then $9.
This positive view will be negated if the bears sink the price below the 20-day EMA. Such a move will suggest that the bears are not buying the dips anymore, as they expect the price to fall further.
CREAM has been on a stellar run from the intraday low of $38 on Nov. 26 to the Dec. 3 intraday high at $92, a 142% gain during the short span.
The price turned down sharply from $95 on Nov. 1 and from $92 on Nov. 26. Hence, the bears are again likely to defend the $92 to $100 overhead resistance zone.
However, if the bulls can propel the price above $100, the CREAM/USD pair could rally to $130 and then to $160. The rising 20-day EMA ($57) and the RSI in the overbought territory suggest that bulls are in control.
Contrary to this assumption, if the price turns down from the current levels, it could dip to the 20-day EMA. If the bulls buy the dip to this support, it will suggest that the sentiment remains positive and the bulls are accumulating at lower levels.
If the pair rebounds off the 20-day EMA with strength, the bulls will again try to push the price above the overhead resistance zone. Conversely, if the bears sink the price below the 20-day EMA, the pair could drop to the 50-day simple moving average ($43).
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