With the cryptocurrency market recovering from its June lows, many altcoins have experienced unprecedented growth. VeChain, Loopring, and Uniswap were some of these altcoins.
UNI, in particular, has risen significantly over the past few weeks. So much so that it will likely replace quite a few other digital currencies in the rankings.
Uniswap climbs the ranks
Having fallen below nearly $3.6 in June immediately after the crash, it took the altcoin just under two months to recoup all of its losses. In doing so, it rose more than 148.83% to reach the press time trading price of $9.005.
In fact, it also recovered from the May low, as the swing was on track to reverse the losses of the April crash. However, he may not have all the ammo he needs to breach the $10 mark.
This is because buying pressure, which has been the biggest force of the altcoin all this time, will soon reach saturation point.
This can be supported by the depletion of UNI’s supply on the exchanges. Same, right now, at a seven-month low of 59 million. Over the past month, more than 4.2 million UNIs worth more than $37 million have been purchased by investors. This buildup can be seen continuing at the time of writing as well, but may stop soon.
This could be because as indicated by the Relative Strength Index (RSI), the altcoin is currently overbought in the market due to the FOMO generated by its rally. Since most investors will be profit-seeking traders, they can sell soon, which ultimately leads to a lower price action. (Ref. Uniswap price action picture).
It looks like this could happen sooner than expected. Cross-chain liquidations, in relation to Uniswap, have been very high over the past few weeks. Short liquidations, in particular, were a concern because at some point in July, nearly $3 million in short liquidations were recorded. The volume has been fluctuating since the same time as well.
Ergo, new investors looking to enter the market now may want to watch the market carefully as a correction may be coming soon for UNI.