4 September 2020

BTCUSD daily chart

Key takeaways: BTC lost 15% in correction, CME Futures “filling the gap” theory calls for $9700 target, ETH price dropped 20%, but Yearn's yETH vault survived

Bitcoin price went down by 15% over the past two days. his fall was expected as there were several bearish signs covered in our previous issue. Moreover, BTC has been on the rise since March without any major correction, so it was only a matter of time to face one. Bitcoin got supported by a 100-day moving average and a short-term bounce off of this support level is possible, but can bitcoin price go even lower?

BTC/USD CME Futures Daily Chart

4 sept gap

According to CME Futures “filling the gap” theory - yes it can. There is a gap on a daily chart to be filled at $9700. Historically this has been a pretty accurate indicator for setting targets which means Bitcoin price might go down a further 6%.

ETH/USD Daily Chart

4 sept ethusd daily

Ether followed bitcoin to the downside and lost 20% in 2 days. It got supported at $375 level and a 50-day moving average. The bearish divergence on a daily Relative Strength Index remains and MACD indicator is in the red zone. We might see a continuation of a down trend to the next closest target at $345.

Despite a massive drop in ETH price, Yearn's yETH vault has survived thanks to rebalancing and the capability to pay out the debt. Yearn Finance had to pause yETH deposits after 70 million DAI had been created. For now this in order to balance between best profits and best risk adjustment. The liquidity in the yETH vault reached $100 million on the first day (230,000 ETH). The next day it increased by 62%, even though the price was dropping significantly.

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