Uniswap: Market Swing Yields 12% Gains – Can UNI Sustain The Momentum?

Christian Encila

9 months ago

3 mins read

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With the broader market swing suggesting that most cryptocurrencies are in a bull run, Uniswap has continued its upward trajectory, capturing some of the momentum of the broader market. According to CoinGecko, the token is up nearly 12% since last week despite the market dipping slightly yesterday, August 21st.

Uniswap’s position within the crypto community is largely untouched, especially after its recent on-chain development that shows exceptional growth as a market. However, there are some aspects where the platform is seeing some weakness, putting UNI’s position into question in the long term.

Uniswap Sees Exponential Increase In Uniswap v2 Trading Pairs

In a recent X post, Uniswap shared a Dune query made by Austin Adams, a research fellow on the platform. It revealed that ever since Uniswap v2 was launched on the platform’s major partner blockchains, trading pairs on the latter have skyrocketed by a significant degree.

Weekly number of pools being created on Uniswap v2

Optimism: 342
Arbitrum: 1,866
Polygon: 2,989
Ethereum: 118,820

…and Base: 512,545 🔵 pic.twitter.com/VkBPaY4qMq

— Uniswap Labs 🦄 (@Uniswap) August 19, 2024

From its initial figure of 79,277 back in February, it soared to over 636,562 as of August 19th; a whopping 703% increase since it was first deployed.

The largest share of the bunch was Base, CoinBase’s in-house Ethereum layer-2, with over 512,545 pairs alone on its Uniswap v2 deployment. The trust built within this period between Uniswap and a major market player like CoinBase will help the ecosystem in the long term.

However, criticisms arose as to how the data was translated and what it represented.

this is a bit odd / surprising — seems like an extreme long-tail distribution of liquidity that results in many pools being insufficient

am i thinking about this correctly?

— brady 🌴 (@bmgentile) August 19, 2024

CEO of Bonzo Finance Labs, Brady Gentile, stated that the data was odd and surprising for him, leading to the conclusion that the data represents that a lot of the pools included in the 636,562 figure don’t have sufficient liquidity, thus finding the need for multiple liquidity pools for the same pair.

UNI is now trading at $6.9. Chart: TradingView

The sentiment has been echoed by the majority of the comments on the post. This air of suspicion with how the data is shown and with little to no chance of it being addressed by Uniswap may affect the overall view of the platform.

Breakthrough On $6.8 In The Short Term

With the slight drama surrounding how data was represented on the platform, the broader sentiment flipped from bullish to bearish as the bears tackled the breakthrough on the $6.8 ceiling.

With exchange reserves of the token reaching monthly highs, UNI bulls are exhausted and overburdened by strong market pressure in the short term which will inevitably lead to losses. UNI may retrace to $5.8 in the short term before stabilizing on the $5.8-$6.8 in the medium term before another attempt in the long term.

However, this can only happen if the market itself is bullish, but with the recent up-and-down swings it has been experiencing, caution should be exercised to prevent further losses.

Featured image from FineProxy, chart from TradingView

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

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