After crashing last week, Uniswap (UNI), prices rebounded strongly. This was in response to China’s decision that it would intensify its anti Bitcoin (BTC) rhetoric.
The intraday high for UNI was $26.26, which saw a 14.90% increase in the price. The UNI/USD gained after falling to a low of $17.63 a day earlier. It generated more than 48% profit for dip buyers in the past 24 hours.
UNI is a governance token within Uniswap’s decentralized exchange ecosystem (DEX). Its holders can vote on matters that will affect the future direction and growth of the DEX platform.
UNI holders may also be eligible for a future revenue share. Uninitiated: Uniswap’s governance agreement contains a “fee switch”. If activated, it will allow UNI holders to receive a portion of the protocol’s fees.
Some users generate revenue by contributing to Uniswap’s assets pools. They earn between 0.05% & 1% of the trade value in the current version.
Uniswap’s Liquidity Pool Schematic. Source: Uniswap Official Doc Page
UNI could see a higher adoption rate due to the possibility of Uniswap growing as a DEX. It appears that tokens have been more popular than ever with speculators due to China’s increasing crackdown on crypto industry.
In a Friday announcement, the People’s Bank of China and other government agencies declared crypto transactions illegal. They also warned that providing online trading services for Chinese citizens is illegal, and targeted cryptocurrency exchanges offshore.
This was done to close a loophole left after the PBoC prohibited all regional financial institutions from providing services to cryptocurrency companies. China-based traders continued to use offshore cryptocurrency trading platforms such as Huobi and Binance during this period.
BREAKING: After the Chinese government declared #Bitcoin trade illegal, #Huobi (and #Binance), the two largest crypto exchanges worldwide, have now completely suspended all new users from Mainland China. pic.twitter.com/ILExeMmgBU
— Mr. Whale (@CryptoWhale), September 26, 2021
Decentralized trading platforms such as Uniswap, however, are trying to avoid governmental jurisdictions by replacing custodial assets models with non-custodial ones based on smart contract and multi-signature technology.
The recent buying spree in Uniswap markets coincided with similar rallies in DEX tokens.
Uniswap, SushiSwap, and SushiSwap (SUSHI), have led DEX gains over the past 24 hours. Source: Messari
The DEX index, which contains 60 assets, was up 10.27% at 12:05 UTC. This calculation was based on a 24-hour adjusted period. The gains of 13 centralized tokens such as Binance Coin (BNB), and FTX Token(FTT) were only 0.77% over the same time period. This suggests traders’ sudden FOMO towards their DEX competitors.
In the last 24 hours, centralized exchange tokens Source: Messari
Technicals at UNI
UNI prices were trading lower within a parallel descending channel, which appears to be the “handle” of a classic cup and handle technical pattern.
When an asset forms a cup-shaped bottom (cup), it corrects after a solid move higher. This is called the setup. It then tends lower in a downward channel range, which usually leads to a breakout to upside.
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The asset rises so that it sets its bullish target at the same distance as the cup’s depth.
UNI/USD daily chart showing the handle and cup pattern. Source: TradingView
UNI has met all requirements when it comes to forming the cup and handle pattern in recent sessions. The Uniswap token has been aiming for a breakout of its descending channel range. Its profit target is $17.83 higher than the cup’s resistance at $48.54.
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