Uniswap bounces back: 64.25% surge in open interest signals bullish trend

Uniswap (UNI), a leading decentralized finance (DeFi) protocol, has experienced a significant price rebound, accompanied by a notable 64.25% increase in open interest. This surge in activity has captured the attention of traders and analysts, raising questions about the factors driving this momentum and what the future may hold for Uniswap.

In the second week of June, intense supply pressure caused a new correction in Bitcoin and most other major cryptocurrencies. The price of Bitcoin, however, managed to keep steady at around $65000 during the weekend, while ETH recovered $3500. Uniswap decentralized exchange’s native coin, on the other hand, ignored market instability and saw a 14.5% price increase to achieve $11.5 today.

The recent price rebound of Uniswap can be attributed to several key factors. Firstly, the overall cryptocurrency market has shown signs of recovery, with major assets like Bitcoin and Ethereum regaining strength. DeFi projects like Uniswap benefit from increased investor confidence and capital inflows as market sentiment improves.

Another driving force behind Uniswap’s price surge is the growing adoption and utility of decentralized exchanges (DEXs). As regulatory scrutiny intensifies on centralized exchanges, more traders and investors are turning to DEXs for their trading needs. Uniswap, being one of the most prominent and user-friendly DEXs, has seen a rise in trading volumes and user activity. This shift towards decentralized trading platforms has bolstered Uniswap’s market position and contributed to its price rebound.

The 64.25% increase in open interest is particularly significant, indicating heightened trader engagement and speculative interest in Uniswap. The entire amount of outstanding derivative contracts—such as futures and options—that have not yet been settled is referred to as open interest. A rise in open interest typically suggests that more traders are entering the market, betting on the future price movements of the asset.

This surge in open interest can be seen as a bullish signal, reflecting increased confidence in Uniswap’s price trajectory. Traders are actively placing bets on further price appreciation, driven by positive market fundamentals and the overall growth of the DeFi sector. However, it also introduces the potential for increased volatility, as a large number of derivative positions can amplify price movements in both directions.

After its previous correction trend bottomed at $6.73 on May 15, the price of the Uniswap token entered the current rebound trend. The asset rose 77% within three weeks, reaching a high of $11.96 thanks to this bullish turnaround.

This rising trend has recently changed to the side as the wider market suggests that the BTC price may continue to consolidate after dropping to $65000. The price of UNI fell to $8.7 due to fresh supply pressure, but it quickly recovered to show active accumulation amid market downturns.

Coinglass reports that Uniswap’s open interest has increased significantly during the current rebound, rising from $89.21 million on June 12 to $146.5 million. This almost 64.25% gain in price suggests that investors are becoming more interested in Uniswap, and it may also portend impending price fluctuations or increased market activity.

Analyzing Uniswap’s price action, the recent rebound has seen UNI break through several key resistance levels, indicating strong upward momentum. The price has formed a bullish trend pattern characterized by higher highs and higher lows. Technical indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are showing bullish signals, suggesting continued upward momentum.

The RSI, a momentum oscillator that measures the speed and change of price movements, is currently in the overbought zone. While this indicates strong buying pressure, it also suggests that a short-term pullback could occur as the market consolidates before resuming its upward trend. The MACD, which shows the relationship between two moving averages of an asset’s price, has crossed into bullish territory, further supporting the positive outlook.

Additionally, the volume profile for Uniswap has shown an increase in trading volumes, which often precedes significant price movements. High volume on upward price movements typically signals strong market conviction and can indicate the sustainability of the trend.

Several on-chain metrics also support the bullish outlook for Uniswap. The number of active addresses interacting with the Uniswap protocol has risen, indicating growing user engagement. Additionally, the total value locked (TVL) in Uniswap’s liquidity pools has increased, showcasing the platform’s appeal to liquidity providers and the broader DeFi ecosystem.

Uniswap has also lately included ZKsync in its platform. With the Uniswap interface, users may now swap and provide liquidity on ZKsync directly, saving money on gas costs and speeding up transactions. The UNI token should naturally gain demand as a result of this development.

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According to an examination, the Uniswap price is forming an inverted head and shoulder pattern on the daily chart. This chart pattern, observed during the main market bottom, suggests that purchasers are becoming more optimistic about UNI token dealers.

At $11.5, the price of Uniswap is suggesting a breakthrough from the pattern’s neckline. The possible breakout would encourage buyers to push above the $17.5 mark and aim for $24.86. Looking ahead, the future for Uniswap appears promising but not without challenges.

Harsh Chauhan

Harsh Chauhan is an experienced crypto journalist and editor at CryptoNewsZ. He was formerly an editor at various industries and has written extensively about Crypto, Blockchain, Web3, NFT and AI. Harsh holds a Bachelor of Business Administration degree with a focus on Marketing and a certification from the Blockchain Foundation Program. Through his writings, he hold the pulse of rapidly evolving crypto landscape, delivering timely updates and thought-provoking analysis. His commitment to providing value to readers is evident in every piece of content produced.

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