Uniswap managed to maintain healthy trading volumes in the last couple of months amid a disruptive bear market. A healthy outcome but events that unfolded during the bear market underscore its ability to become a bigger juggernault in the DeFi space than it already is.
A recent Grayscale report about the ongoing bear market helps to put Uniswap’s potential into perspective. It notes that Uniswap has more depth for major cryptocurrency pairs than top centralized crypto exchange.
This includes Binance which is currently the largest crypto cap by volume. This is because its secret weapon is higher liquidity and that is how it managed to outperform the competition.
Trouble in centralized finance
The collapse of centralized finance platforms within the blockchain industry contributed a great deal to the sell pressure in the last few months.
Many investors have started to view CEFI staking and liquidity platforms as riskier. This outcome has supported the flow of liquidity to DeFi platforms and this puts Uniswap on the advantage.
The liquidity flow in favor of decentralized finance platforms is expected to boost Uniswap’s UNI token’s performance during the next market cycle.
However, the same Grayscale report suggests that the bear market might extend at least for another four to five months. This means UNI’s price action might remain subdued.
UNI is still up by roughly 92% from its current 2022 lows, with a $6.70 price tag at press time. It might shed some of its gains in the short-term, especially if the Grayscale projection about the bear market is accurate.
UNI’s support is currently holding at the 0.382 Fibonacci retracement level for now.
Short-term outlook remains uncertain marching into the weekend.
There is some glimmer of hope for the bulls now that network growth appears to be picking up after falling to its lowest 4-week levels on 23 August.
UNI’s long-term outlook still favors the bulls, especially taking into account the liquidity flow and its lead as one of the top DeFi platforms.
Its long-term performance has so far delivered healthy gains as indicated by the steady growth in mean coin age.
Unfortunately, the situation is different for the realized capitalization metric which fell to the lowest 12-month lows in July. This is because most of the buyers bought when the hype was near the peak, and the bear market left them in the red.