Uniswap Stuck In The Ground As UNI Copes With Falling Network Activity
According to Santiment, the decentralized exchange Uniswap has not experienced any kind of recovery. Santiment recently tweeted that Uniswap is one of the outliers in the active addresses measure, indicating that the DEX’s native token UNI is underperforming relative to other cryptocurrencies.
According to the data, the number of functioning IP addresses last increased when Uniswap introduced its NFT market aggregator following the acquisition of Genie, the pioneering NFT market aggregator.
Address decline may indicate investors and traders have lost interest in the exchange.
📊 Several #altcoins are seeing big upticks in address activity and dormant wallets awakening to move their funds right now. Others are staying stuck in the mud, and are more likely to fall behind. Read our short take on $YFI, $REN, and $UNI. pic.twitter.com/sRSyiDvqVe
— Santiment (@santimentfeed) December 15, 2022
Negative Market Sentiment
To summarize, Uniswap’s network activity has been very unpleasant for investors on its native token. As of writing, UNI is down 2.4% with subsequent drops in the weekly, bi-weekly, and monthly timescales. This negative market sentiment can be seen on-chain.
In the time after its release in November, the volume of NFT transactions processed by Uniswap’s marketplace aggregator has dropped significantly, as reported by Dune Analytics.
Numbers show that there were only 39 recorded transactions today, down from 446 on November 30. That is a drop of 91.25%.
This contradicts what Uniswap Labs COO Mary-Catherin “MC” Lader stated to Fortune in an interview. She stated that the NFTs’ underlying technology is still in its infancy. Other proponents of the technology have utilized this reasoning.
Whether or not the NFT business is in its infancy, data indicates that it is barely alive, with few customers and sellers, as seen by large declines in trade volume and sales.
UNI total market cap at $4 billion | Chart: TradingView.com
In addition to the UNI NFT issue, the market has yet to recover from the FTX collapse. The recent hike in interest rates by the US Federal Reserve adds to the strain.
With the big cryptocurrencies also seeing value declines, UNI’s long-term prospects may worsen. In terms of pricing, the token appears to find support in the $5.2 range. What’s interesting is that UNI has a strong correlation with Bitcoin.
This means that when Bitcoin appreciates, UNI will as well. The market will rebound as institutional interest in cryptocurrencies and digital assets in general grows. Short-term UNI bulls can benefit at the $6.5 price level.
Nonetheless, investors and traders should continue to take prudence, as further rises in interest rates by the central bank could result in market declines.