This Week’s Mild Price Upswing for Uniswap (UNI)
This week, Uniswap (UNI) has experienced a slight increase in price as bullish sentiment returns to the global crypto markets. However, the question remains: will the lag in market liquidity slow down the Uniswap price rally?
Recent reports indicate that Binance’s dominance in the crypto spot trading markets has declined for the second consecutive month. As a result, Uniswap, along with other popular Centralized Exchanges (CEXs) like Huobi and Coinbase, has benefited from this waning traction.
Despite growing network demand, there is a concern that a lag in market liquidity could hinder the UNI price rally. Uniswap made another attempt at reaching the $4.50 territory on September 20.
Uniswap Network Attracts New Users
In recent weeks, Uniswap has seen a surge in new users and network traction. On-chain data shows that 444 new UNI wallet addresses were created on September 19, marking a level of growth not seen since July 21.
In addition, UNI daily active addresses reached a one-month peak of 884. This indicates that the new joiners are actively participating in economic activity on the Uniswap network.
Flat Market Liquidity Despite Network Growth
Although Uniswap’s network demand has increased to a two-month high, the liquidity traded across UNI spot markets has not kept pace. The UNI trading volume has remained relatively flat since the beginning of September.
This divergence between the upward trend in UNI price and the decline in trading volume raises concerns. Without sufficient market liquidity, traders may struggle to efficiently fill their orders, potentially leading to a short-lived UNI price rally.
UNI Price Prediction: Bears Could Target $3
If market liquidity does not significantly increase, the UNI price is likely to face resistance around the $5 range. The In/Out of Money Around Price data supports this prediction, showing that a significant number of investors purchased UNI tokens at the maximum price of $4.74.
However, if the bulls can push past this resistance level, the Uniswap price could potentially reach the $5 range. On the other hand, bears could target a downswing toward $3.50, but they may face strong support at the $4.20 level.
Hot Take: Market Liquidity is Key for Uniswap’s Price Rally
The recent mild price upswing for Uniswap (UNI) has been driven by growing network demand and new user adoption. However, the lag in market liquidity poses a potential obstacle for further price gains. Without sufficient liquidity, traders may struggle to fill their orders efficiently, which could limit the longevity of the UNI price rally. It remains to be seen whether increased liquidity will accompany the network growth and support sustained upward momentum for UNI’s price.
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