Uniswap is a decentralized exchange (DEX) protocol created by Hayden Adams in 2018. DEX allows you to exchange ERC20 tokens through software or hardware wallets. What is important, the exchange in this case is non-custodian, that is, the user does not transfer his assets to third parties for storage at any moment of the transaction. Uniswap’s trading volume in recent days has ranged from $ 700 million to $ 1 billion – more than, for example, Bitfinex.
Uniswap unveiled its own UNI token for protocol management on September 16, 2020, by distributing it via an airdrop. At the time of publication, UNI has a capitalization of $ 5.8 billion, making it the 13th largest asset in the market and potentially the first DeFi project to enter the top 10 of the market. Analyst Josh Olshevich sharedhis thoughts on whether UNI can do it.
Activity on the DEX has risen sharply in recent months, with Uniswap collecting most of the volume. Despite increasing competition, Uniswap’s trading volumes continue to grow from month to month. The trading volumes on Sushiswap also significantly increased.
DEX trading volumes Image: Dune Analytics
150 million UNI were released for distribution via the airdrop. 49,192 liquidity providers received 49 million UNI, and all addresses that had ever interacted with Uniswap prior to early September were due 400 UNI. There were 251,534 of them. 43% of the total volume of the initial issue of UNI was transferred to the reserves for management, which are subject to release on a current basis. Four years later, the inflation mechanism will be launched, which will be 2% per year.
UNI Distribution Image: Uniswap UNI’s turnover
is currently 287 million tokens, with a cap of $ 1 billion. $ 3.2 billion is locked in the Uniswap protocol in various assets, including tokenized BTC, ETH and DAI. This makes Uniswap the fourth largest DeFi protocol in terms of locked assets after MakerDAO, AAVE and Compound.
The volume of assets blocked on Uniswap Image: DefiPulse
At the blockchain level, UNI has shown a significant increase in the number of daily transactions and the size of such transactions over the past weeks. The number of transactions peaked at an all-time high of 294,000 during the initial distribution phase in September. Since December, the number of transactions has quadrupled to over 12,000 per day. Also, during this time, the average transaction amount and the token price have grown significantly.
Number and size of UNI transactions Image: CoinMetrics
The weekly ratio of network value to the number of transactions on the blockchain (red line) has been in the range of 20-285 over the past months. An obvious downtrend indicates that the token is undervalued in line with economic activity and value, which should be taken as a bullish indicator. The number of active addresses per day reached 180,000 during the initial distribution. At present, it is over 8,000 and has been growing over the past months.
Network Value Ratio and UNI Active Addresses Image: CoinMetrics
Interest in Uniswap on Google has increased significantly in mid-2020 and has increased again in recent weeks. A 2015 study showed a strong correlation between the number of searches and the value of bitcoin, and in May 2017, analysts found that a sharp increase in the number of searches coincided with the beginning of a decline in the price of bitcoin.
Indicators such as exponential moving average (EMA), volume profile of the visible range, pivot points, Ichimoku cloud and divergences can suggest the further direction of the course.
UNI has a limited trading history, so it should be analyzed on shorter time frames than the daily chart provides. On the 4-hour chart, the 50-EMA and 200-EMA formed a bullish crossover on December 17, after which the rate rose 390%. Resistance is higher in the zone of price determination based on annual pivot points located near $ 22.50 and $ 27.
The price is currently twice the 200-EMA and has not reached it since Jan 11. If horizontal support fails, the next significant support lies around $ 13.30-14.30 in line with annual pivots and the 50-EMA. In addition, there are currently no bearish divergences in volume, meaning the Relative Strength Index (RSI) does not imply decay in bullish momentum.
The Ichimoku Cloud also gives bullish signals. The spot price is above the cloud, the cloud is in a bullish trend, the intersection of the Tenkan and Kijun lines is bullish, the offset line is above the cloud and the current spot price. The trend will remain bullish as long as the spot price holds above the cloud, currently above $ 11. Kijun support is at $ 13.88.
The UNI / BTC pair is trading near the most historic highs in a bullish trend. Resistances are higher based on annual pivot points at 64,000 and 110,000 satoshi, support is around 43,000. However, the widening bearish divergence in the RSI suggests weakening bullish momentum in the pair.
Non-custodial decentralized exchanges began gaining popularity rapidly in mid-2020 along with the rise of the DeFi space in general. The UNI airdrop has been so successful that it has prompted many other DEXs to use the same model. Volumes, amount of assets committed and metrics at the blockchain level indicate the growing use of Uniswap and UNI over the past months. Technical factors in the UNI / USD and UNI / BTC pairs indicate a continuation of the bullish trend.