HiFi Finance (HIFI) Price Plummets 70% After Binance Opens HIFI Perpetual Contract

Key Takeaways:

• HiFi Finance is a DeFi lending protocol.
• Binance recently launched HIFI perpetual contracts on its platform.
• HIFI prices plummeted after the launch went live.

NEW DELHI (CoinChapter.com) — DeFi token HiFi Finance (HIFI) price plummeted after reaching a new all-time high on Sept. 16, after Binance launched HIFI perpetual contracts on its platform.

HiFi Finance is an Ethereum-based DeFi lending and borrowing platform comprising decentralized interest rate markets. The platform uses an AMM model, where users supply tokens to liquidity pools, and an algorithm sets the interest rate.

Binance launched HIFI perpetual contracts on its platform on Sept. 16.

However, following the launch of HIFI perpetual contracts, the token’s price action went haywire, resulting in massive liquidations of HIFI positions, both short and long.

According to data from Coinglass, HIFI perpetual contracts saw $5.12 million in liquidations, spread almost equally between short positions ($2.68 million) and long positions ($2.44 million).

As the price spiked, the funding rate for HIFI contracts turned negative, plummeting nearly 1,460% from Sept. 15 to reach a -2% on Sept. 16. Though the rates tried to rise later during trading, the price spike likely resulted in massive liquidations for both short and long positions.

Furthermore, on Sept. 17, the funding rate declined to -2.275%, while long positions led to HIFI contracts’ liquidations. The increased negative funding rate underscored the market’s bearish sentiment, especially since HIFI prices crashed over 65% on Sep. 17 to reach a daily low near $0.85.

Traders remain bearish for HIFI on Sept. 18, as evidenced by the slight increase in the negative funding rates.

HIFI Price Volatility Due To Korean Traders?

Blockchain journalist Colin Wu noted that Korean traders might be responsible for the upheaval in HIFI prices.

Wu stated that the South Korean exchange Upbit was the largest spot market player in HIFI trades, with a 24-hour trading volume of $717 million on Sep. 17.

CEO and co-founder of Cryptoquant, Ki Young Ju, noted in a series of Dec 2021 X (formerly Twitter) posts that pump-and-dump tactics were normal on Korean exchanges.

Ju had claimed that the pump-and-dump trading methodology resulted from the Korean government’s “strict capital controls blocking arbitrage opportunities between global exchanges.”

Meanwhile, several traders claimed massive profits from HIFI trades in long and short positions in X posts.

HIFI Price Struggles After 70% Drop

Meanwhile, HIFI bulls managed to arrest the token’s downtrend above the 20-day EMA (red wave) dynamic support level. Long wicks on both ends of the token’s daily price candle highlight the struggle between the bulls and the bears.

If the HIFI price continues its downtrend, the token might drop to the support near $0.77. Moreover, breaching the immediate support could force the HIFI price to test the 50-day EMA (purple wave) resistance near $0.6.

However, if buyers enter the market, the HiFi Finance token price might rise to the resistance near $1. Breaking and consolidating above the immediate resistance might help HIFI price target the resistance near $1.23.

The RSI for HIFI remained neutral, with a score of 51.3 on the daily charts.