The DeFi craze is showing no signs of cooling off, and each week a new crypto token is on fire as a result. The industry’s hottest token currently, is LEND, a DeFi protocol for lending and borrowing crypto assets.
The altcoin is up over 3000% in 2020 alone, but there are at least three major signs that the current explosive LEND trend is about to end.
DeFi Hype Helps Yet Another Token Climb To Super Stardom
The DeFi hype train is taking investors for quite a ride. Each passing week, another token is stealing the limelight and experiencing soaring gains.
Recently, the DeFi token Compound was flooding everyone’s Twitter feeds, but this week, its a cryptocurrency called Aave (LEND).
The LENDUSD price chart has been about at bullish as it gets. After falling over 99% from a high of 50 cents a token, a bottom was found at just a fraction of a penny.
Related Reading | What’s Fueling DeFi Token Compound’s Powerful 20% Intraday Rally
But since the bottom was set in mid-2019, LEND has gone on an explosive over 10,000% rally. Gains like this were common during the crypto hype bubble, but it’s been years since crypto assets moved like this.
It’s primarily driven by the incredible hype currently surrounding the decentralized finance industry. DeFi tokens have been all the rage, not only bringing investors gains through their investments but through other methods.
Some DeFi tokens, such as LEND, allow users to lend and borrow cryptocurrency assets and earn a yield. The added return on investment has made these protocols especially attractive, and their tokens have been crypto industry top performers.
Three Signs That The LEND Trend Could See a Strong Short-Term Correction
But all good things must come to an end, and all uptrends eventually correct and cool off. That may be what’s about to happen in LENDUSD, according to key technical analysis indicators.
On weekly timeframes, there is a massive bearish divergence on the LENDUSD Relative Strength Index. The previous example of a bearish divergence resulted in an over 70% crash.
Relative Strength Index Bearish Divergence | Source: TradingView
Next, the weekly MACD shows extremely overbought conditions, represented by a divergence of the two moving averages.
MACD Overbought on Weekly | Source: TradingView
Lastly, the weekly Average