With the broader market swing suggesting that the majority cryptocurrencies are in a bull run, Uniswap has continued its upward trajectory, capturing among the momentum of the broader market. In line with CoinGecko, the token is up nearly 12% since last week despite the market dipping barely yesterday, August twenty first.
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Uniswap’s position throughout the crypto community is essentially untouched, especially after its recent on-chain development that shows exceptional growth as a market. Nevertheless, there are some facets where the platform is seeing some weakness, putting UNI’s position into query in the long run.
Uniswap Sees Exponential Increase In Uniswap v2 Trading Pairs
In a recent X post, Uniswap shared a Dune query made by Austin Adams, a research fellow on the platform. It revealed that ever since Uniswap v2 was launched on the platform’s major partner blockchains, trading pairs on the latter have skyrocketed by a major degree.
Weekly variety of pools being created on Uniswap v2
Optimism: 342
Arbitrum: 1,866
Polygon: 2,989
Ethereum: 118,820
…and Base: 512,545 🔵 pic.twitter.com/VkBPaY4qMq
— Uniswap Labs 🦄 (@Uniswap) August 19, 2024
From its initial figure of 79,277 back in February, it soared to over 636,562 as of August nineteenth; a whopping 703% increase because it was first deployed.
The most important share of the bunch was Base, CoinBase’s in-house Ethereum layer-2, with over 512,545 pairs alone on its Uniswap v2 deployment. The trust built inside this era between Uniswap and a serious market player like CoinBase will help the ecosystem in the long run.
Nevertheless, criticisms arose as to how the info was translated and what it represented.
this can be a bit odd / surprising — looks like an extreme long-tail distribution of liquidity that ends in many pools being insufficient
am i enthusiastic about this appropriately?
— brady 🌴 (@bmgentile) August 19, 2024
CEO of Bonzo Finance Labs, Brady Gentile, stated that the info was odd and surprising for him, resulting in the conclusion that the info represents that a variety of the pools included within the 636,562 figure don’t have sufficient liquidity, thus finding the necessity for multiple liquidity pools for a similar pair.
UNI is now trading at $6.9. Chart: TradingView
The sentiment has been echoed by the vast majority of the comments on the post. This air of suspicion with how the info is shown and with little to no probability of it being addressed by Uniswap may affect the general view of the platform.
Breakthrough On $6.8 In The Short Term
With the slight drama surrounding how data was represented on the platform, the broader sentiment flipped from bullish to bearish because the bears tackled the breakthrough on the $6.8 ceiling.
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With exchange reserves of the token reaching monthly highs, UNI bulls are exhausted and overburdened by strong market pressure within the short term which is able to inevitably result in losses. UNI may retrace to $5.8 within the short term before stabilizing on the $5.8-$6.8 within the medium term before one other attempt in the long run.
Nevertheless, this may only occur if the market itself is bullish, but with the recent up-and-down swings it has been experiencing, caution must be exercised to stop further losses.
Featured image from FineProxy, chart from TradingView