Yerevan (CoinChapter.com) — Nothing is stopping Uniswap’s native token UNI from achieving new highs for the next three weeks, so believes an independent analyst.
The pseudonymous entity, dubbed as CoinMamba, said Monday that he sees the decentralized exchange token on an upward trajectory until May 5. He was pointing at the Uniswap V3 launch on the said date, an update that proposes to improve the exchange’s capital efficiency 4000-fold through a new feature called “concentrated liquidity.”
A Brief Background
As Uniswap V3 whitepaper mentions, Concentrated Liquidity enables individual liquidity providers to specify a price range for their pooled funds. That effectively allows them to earn more fees and enhance the market depth of trading pairs listed on the Uniswap exchange.
“Capital efficiency paves the way for low-slippage trade execution that can surpass both centralized exchanges and stablecoin-focused automated market makers,” reads the Uniswap V3 whitepaper. “LPs can significantly increase their exposure to preferred assets and reduce their downside risk.”
CoinMamba sees the protocol upgrade as a bullish catalyst for UNI, a cryptocurrency that serves as a governance token inside the Uniswap decentralized exchange ecosystem. The analyst expects bids for UNI/USD and UNI/BTC pairs to rise leading up to the V3 launch.
“This time we know it’s not the announcement but the actual launch,” he clarified.
The statement appeared as UNI jumped by more than 20 percent on Monday for unknown reasons. The token climbed to a new all-time high of $38.43 before turning lower by small proportions during the US session. For starters, it appeared like a part of an exchange sector pump on Monday.
Like Uniswap’s UNI, Binance’s BNB token also surged massively, led by speculations that the US exchange Coinbase’s listing on Nasdaq this Wednesday would bring more institutional attention to other exchanges.
UNI Technical Outlook
Technically, Uniswap’s UNI now trades inside a rising channel. Traders could open a short position towards the Channel’s lower trendline on a pullback from the upper trendline. Similarly, a retracement from the lower trendline could have traders open a long bet towards the upper trendline.
Meanwhile, traders should be wary of signs of a breakout. Fundamentals favor bulls, so a breakout above the upper trendline appears more likely to happen, just as CoinMamba predicted. The upside target sits just as high as the maximum distance between the upper and lower trendline. That puts UNI/USD en route to at least $50 on the next leg upward.
Conversely, a breakdown move below the lower trendline also risks crashing UNI/USD by as much as the channel’s maximum height. That puts the pair’s primary downside target inside the $11-13 range.