Key Uniswap Takeaways
- UNI, the cryptocurrency powered by decentralized finance protocol Uniswap, continued its upward trend on Monday.
- Technical indicators signal another record high for the UNI/USD exchange rate.
- More bullish tailwinds come from Uniswap’s upcoming upgrade.
Yerevan (CoinChapter.com) — Uniswap’s governance token UNI expects to hit $50 in the sessions ahead.
The decentralized finance cryptocurrency is currently trading inside an Ascending Triangle, confirmed by a flurry of troughs on a rising trendline and roughly equal highs atop a horizontal line. Traders interpret Ascending Triangles as bullish continuation patterns during an asset’s uptrend. UNI fits the description so far.
Uniswap Breakout Anticipated
A basic tenet of the indicator is that the asset turns its horizontal resistance into support to attempt a bull run. The price typically breaks upward after it reaches or nears the point where the Triangle’s rising trendlines converge with the horizontal trendline. Meanwhile, if the volume increases alongside the breakout move, it indicates an extended uptrend ahead, typically by as much as maximum Triangle height.
The widest distance between the UNI Triangle’s trendlines is roughly $15. Therefore, if the token breaks bullish, it has the potential to rise by about $15 higher. That puts the UNI/USD en route to $50 in the short-term.
Fundamentals support a bullish scenario.
Blockchain intelligence platform IntoTheBlock noted a spike in Uniswap’s growth as a decentralized exchange that contributed to raising appetite for UNI tokens. For instance, in just 78 days of 2021, the protocol did $73.1 billion in traded volume and over $219 million in fees.
Meanwhile, the total value locked inside the Uniswap liquidity pools reached a new all-time high of $5.23 billion.
Many analysts also credited the euphoria surrounding Uniswap’s upcoming upgrade behind its recent bullish performance.
In retrospect, the platform’s liquidity surged twofold after it announced that it would reduce its dependency on the Ethereum blockchain network after the latter suffered from massive gas costs and transaction fees. In its next upgrade, Uniswap expects to address these issues by introducing the so-called Layer 2 scaling solutions.
“Uniswap V3 will face slippage and capital efficiency head-on to prove AMMs can outcompete traditional exchanges on all fronts,” said Hayden Adams, the creator of Uniswap.
All the fundamental factors support the ascending triangle breakout theory. However, traders should watch out for any signs of bearish reversals. For instance, a break below the Triangle’s lower trendline could have UNI test its 50-day simple moving average as support.