Yerevan (CoinChapter.com) – REEF, the governance token of decentralized finance (DeFi) Reef Finance, built atop Polkadot blockchain, has been consolidating since Feb 2021. However, there are technical indicators of an upcoming breakout on the REEF vs. USD daily chart.
The token was trading at $0.025 in the London session Monday, approaching the $0.028 price margin (the red line on the chart below). The margin has proven its significance, providing support throughout the consolidation period. Whenever the token price approached the margin, traders bought the dip and sent the price up.
However, in the sessions following the infamous May 19 crash, the margin also provided resistance, capping breakout attempts.
If the $0.028 price margin manages to provide support instead of resistance in the upcoming sessions, REEF could break out over the line for the first time since May 25.
Also, REEF’s 20-day exponential moving average (EMA-20: green wave) is close to the margin. Therefore, if the token breaks the resistance and uses the line as support, the EMA 20 will provide additional assistance, preventing the price from dropping.
What is driving REEF?
Reef Finance platform was created by Gavin Wood, the man behind Polkadot blockchain. It is a proof-of-stake algorithm with low gas fees and high scalability. The platform calls itself “DeFi made easy.” Currently, the governance token is the 137th crypto with a market cap of $318 million.
Reef Finance has launched its mainnet Canary version on May 28, which didn’t support the price. The token had a strong bullish break in the sessions preceding the launch, fueled by anticipation. But it lost over 110 percent in 24 hours after the mainnet was released.
However, the wind might change as the platform announced a $20M Grant Fund launch on June 2 to expand the development of the Reef Chain.
Reef commented that the platform is “looking to attract top-notch talent who are interested in building the DeFi applications of the future with us.” The platform will use the Grant Fund to work in several directions simultaneously. For example, Reef Finance plans to work on wallets and interfaces to make them more accessible and simple.
Also, the platform claims to develop DeFi lending protocols and Runtime modules. The latter is an executable file that is required to run an application on the blockchain. Reef will also focus on Decentralized Exchanges (DEX) and NFT(non-fungible token) development.
After the announcement on June 2, the price still struggled to maintain bullish momentum. However, if the indicated $0.028 price margin proves significant once more, the token will be able to recover. In addition, REEF’s EMA-20 is also close to the said line. Therefore, it will provide additional support if the token gauges gain in the upcoming sessions.