Cream Finance price loses 39% after traders start a sell-off

Key Takeaways:

• Cream Finance’s CREAM token lost nearly 40% since Jan 15 after jumping more than 170% in Jan.
• The decentralized lending protocol took bullish cues from Iron Bank token airdrop.

NEW DELHI (CoinChapter.com) — Decentralized lending protocol Cream Finance’s native token CREAM fell 40% in under three days after the Cream Finance token registered a 171% jump from Jan’s low ($34.45) to reach a high of $93.7 on Jan 15.

Retail traders likely sparked a profit-taking selloff that drove prices down. Furthermore, the CREAM token’s relative strength index broke into overbought regions thanks to its recent bull run. An overbought RSI is usually a sell signal, indicating an asset might be ready for a trend reversal.

CREAM’s RSI rose to 87.95 on Jan 15 before dropping sharply to 71.95 the next day. The Cream Finance token’s RSI is currently neutral, clocking 60.04 on the daily charts. Meanwhile, CREAM’s 26-day EMA provides support near $53. Further downside movement could push prices down to $48.

Sustained selling pressure could bring the $44 support level into play. On the other hand, CREAM token price faces resistance from its 100-day MA line near $66.4. Further upside movement could push CREAM prices to target resistance at $71.6.

Also Read: Yearn Finance (YFI) price jumps 51% in five days, but selloff risks mount.

Meanwhile, trend-based momentum oscillator MACD continues to be bullish for CREAM. The Cream Finance token has had a bullish MACD momentum since Nov 24. 

However, bars on the MACD histogram, which plots the difference between the MACD line (difference between 12-day and 26-day EMA) and the MACD signal line (9-day EMA of MACD), are contracting.

When the price momentum is bullish, contracting bars indicate that CREAM’s momentum is leaning towards the bears.

Cream Finance’s token Fundamentals

Cream Finance is a decentralized lending protocol part of the Yearn Finance ecosystem. It is a permissionless, open-source, and blockchain agnostic protocol. The lending platform’s triple-digit bull run takes cues from the Iron Bank’s recent announcement of an airdrop of IB tokens.

Cream Finance did not have a very good 2021, as hackers targeted the platform three times. The last attack, in late Oct, cost the protocol $130 million. Overall, Cream Finance lost $186 million in 2021, and the platform’s price action suffered as well.

Also Read: Cream Finance DeFi protocol loses over $18 million in latest attack.

For example, when Cream Finance announced discovering an exploit on Oct 27, CREAM’s prices plummeted more than 30% in a day. However, the upcoming airdrop of Iron Bank tokens for CREAM holders has reignited investor interest in the lending platform.

The Iron Bank is the new protocol front-end for the central bank of Yearn Finance. Andre Cronje, ve(3,3) tokenomics and Yearn Finance founder, created the Iron Bank. The protocol powers many of the highest yield pools on Convex Finance. Iron Bank mints ib-tokens, ‘Iron Bank’ labeled token minted from various sources.

CREAM token holders would receive IB token distribution. The airdrop would come in the form of ‘4-year locked veIB on Fantom Opera. ‘Users who stake their CREAM tokens for an extended lock-in period would be eligible for the airdrop.

As users have to stake their CREAM tokens for an extended period, it would reduce the Cream Finance token’s active supply, theoretically leading to an increase in its price.

At the time of writing, CREAM price was trading hands at $63.10, up 2.27% on the day.