Uniswap Liquidity Grew 17,000% in 2020, is UNI Ready for $6?

The Uniswap price capped 2020 strongly.

As of writing (Jan 2), UNI prices are up 35 percent in the last week of trading, only contracting slightly on the last day of trading.

Notably, the UNI price is trading at $4.63, above resistance levels (now support) markedly with above-average trading volumes hinting at demand in lower time frames.

Uniswap (UNI) Price Overview

For UNI bulls, an opportunity may present itself to double down in lower time frames, ramping up purchases expecting prices to re-price higher in days ahead.

However, the pace of this correction (to better prices) highly depends on gains (or losses) this weekend, and whether there will be a follow-through next week.

Presently, the zone between $4 and $4.5 is important from a technical analysis point of view. At spot rates—and overvaluation of Jan 1, prices may dip in a retest back to $4.5 (or lower)—an opportunity for aggressive traders.

Regardless–as long as prices are trending inside Dec 30 and Dec 31 bull bars (and last week’s trade range), bulls can take advantage as alignment favors them from a volumes analysis.

For trend continuation, sharp gains above Dec 30 highs with equally high trading volumes may spark demand for UNI tokens, lifting prices to $5.5 in the medium term.

Uniswap (UNI) Market Movers

Uniswap is a decentralized swapping protocol employing an automated market maker mechanism, ridding the market book.

In September, it launched its governance token, UNI, as a means of not only arresting competition but to take care of the impermanent loss problem.

The addition of UNI explains the exponential rise in liquidity to over $2 billion in 2020, rising 17,000 percent.

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Some highlights from 2020 include:

🦄 Launching the Uniswap V2 protocol

🫂 Launching Uniswap Governance and the UNI token

📈 $58bn in trading volume, up 15,000% from 2019

📊 $2bn in liquidity, up 17,000% from last year

🌐 Over 200 community integrations and counting

— Uniswap Labs 🦄 (@Uniswap) December 31, 2020

Since September, Uniswap has had immense success.

For instance, cumulatively, the decentralized protocol handled $58 billion in trading volumes, year-to-date. It is a 15,000 percent increase. At this pace, it is the largest DEX in the world.

Outside volumes and liquidity, the protocol also saw over 200 community integration. The number continues to rise as the platform finds success.

In the same vein, the voting for the formation of a Uniswap Grant Program (UGP), seeking to provide valuable resources for the growth of Uniswap found support from the wider community.

The UGP establishes a maximum budget of $750k. It shall be led by a committee of six, one lead, and five reviewers.

Uniswap (UNI) Price Prediction

The UNI/USDT pair is trading at $4.63, within a bullish breakout pattern above Nov 2020 trade range.

At spot rates, the UNI price is trading at a three-month high. Accompanying the breakout is high trading volumes, exceeding the recent average.

Technically, and as mentioned before, the path of least resistance is northwards. However, this holds as long as prices are trending inside Dec 30 and 31 bull bars; inside this week’s bar.

In this case, support lies at $4 and $4.5 support zone. Retesting to any of these levels could provide an opportunity for traders to scoop up UNI for cheap. On the flip side, steeper losses below $4 may cause a dump down, invalidating bulls.

Further gains above Dec 31 high paves the road for buyers aiming at $6, the 161.8 percent Fibonacci extension level of Nov to Dec 2020 trade range.

Chart courtesy of Trading View

Disclaimer: Opinions expressed are not investment advice. Do your research.