Uniswap (UNI) has been one of the largest DEXes in the world, and certainly the largest one built within Ethereum’s DeFi ecosystem. The project is not as young as most DeFi protocols, being launched in 2018, but its price has already seen quite a lot of activity only in the past 12 months.
Before skyrocketing in 2021, the token’s price dropped from the initial $6.9 to a bottom price of $1.9 in early November 2020, After that, it started recovering slowly as the Bitcoin rally continued to draw in altcoins.
UNI kept surging between late December 2020 and mid-May 2021, going from $3.7 to an all-time high of $44.97, reached on May 3rd. After being rejected from the resistance at $45, the token was preparing to have another go at breaking it. Unfortunately, that’s when the mid-May price crash arrived, forcing the price all the way down to $16.84 by May 23rd.
Ever since then, the token has been trying to grow back up, but a resistance at $30 kept it below this line, not allowing it to cross and return to its ATH, or potentially go beyond it.
Even now, at the time of writing, UNI is still only at $28, after seeing a 5.48% surge in the last 24 hours, and an even bigger weekly surge of 8.83. But, since the new rally has started as the year entered its final quarter, many are now asking the question — can Uniswap breach the resistance at $30?
What is Uniswap?
Before we try to answer that question, let us quickly recap what Uniswap is.
As mentioned, Uniswap is a popular decentralized trading protocol, also known as a decentralized exchange, or DEX. Its role is to facilitate the automated trading of DeFi tokens. The project has actually been around for a while as an example of an automated market maker. However, it only became a popular decentralized exchange last year, when DeFi took off, and the need for a DEX skyrocketed in Ethereum’s ecosystem.
Uniswap is now trying to keep token trading automated and open to everyone and anyone who holds tokens, seeking to offer better, faster, cheaper service than traditional, centralized crypto exchanges such as Binance, Coinbase, and many others.
The project does this by creating more efficiency, which is in turn done by solving liquidity issues with automated solutions. This allowed it to avoid one of the biggest problems that the first DEXes had to deal with — the lack of liquidity. Since there was low liquidity on DEXes, no one would use them, as they couldn’t buy and sell tokens quickly. And, with no one using them, the liquidity could not grow. This was an endless loop that meant failure for any DEX before AMMs emerged, changing decentralized trading forever.
The project has its own native crypto, of course, the token called UNI, which is used as a governance token. In other words, those who own it get to become a part of the ruling body of Uniswap — a community that can propose changes or vote on the proposed changes, thus affecting the way the platform is developing.
Uniswap hits a new milestone
Over this past weekend, UNI price struggled to breach $27, being rejected by this level down to $25.5, and then returning to try again on Tuesday. This time, the coin had more luck in doing so, and it actually even breached $28 briefly.
For the moment, this level still acts as a barrier for UNI, which skyrocketed from $26.5 to $28 in only a few hours, and while it breach it and reached $28.04, UNI needs to go further in order to turn this level into a support.
Fortunately, this might be something to expect, as the protocol started seeing massive amounts being traded over the last few days. This last weekend, for example, Uniswap saw its total trading volume pass $500 billion. This is a massive milestone for the protocol. Uniswap Labs addressed it on Twitter, noting that the protocol is delighted in knowing that millions of users ‘had direct access to markets that they could trust were operating in their best interest,’ which is why they chose it in the first place.
Uniswap then concluded that the past three years have shown that users place enormous value in transparency, autonomy, security, and reliability — all attributes that can be used to describe this decentralized exchange.
The platform’s volume is growing again, also, as it recently processed $1.3 billion in only 24 hours. Meanwhile, its TVL alone has $3.45 billion right now. Plus, the protocol saw new features added to its dashboard, it launched layer 2 versions of Arbitrum and Optimism, and more.
Can UNI breach $30?
With all the new developments that Uniswap has seen recently, there is little doubt that UNI is still undervalued, and that its price does belong above the $30 mark. All it takes is the right market conditions, and the token’s value will undoubtedly head over towards its old all-time high, and perhaps even pursue a new one. Of course, the token’s ultimate value cannot be known to anyone, so predicting how far it can, or will go is not possible.
However, the DeFi sector continues to grow, more users are being drawn to it every day, and tokens like UNI, which have real utilities and are rather popular, will definitely continue to grow, so a surge beyond $30 can and should be expected. It is a matter of “when,” rather than “if.”
To learn more about this project visit our Investing in Uniswap guide.