The big news that defi fans have been waiting for is finally here in the crypto market. Uniswap Labs just made a big move by proposing to expand their protocol fee system to their newest design through the V4 fee controller system proposal. This news comes together with a direct confirmation from the founder, hayden adams, that the buyback and burn system for their governance token is now fully active and running live on the mainnet. This fee expansion plan is currently moving very fast to collect fees across major networks like robinhood chain, avalanche, megaETH, xlayer, and soneium.
Looking at the fact that this platform can make a fantastic daily revenue of over $5.2M, this step marks the start of the most deflationary supply burn setup in defi history. With such an aggressive burn system across many new chains, $UNI coin has a great chance to see a steady drop in its circulating supply, creating a scarcity effect that is highly wanted by both traders and long term investors.
If we look closely at global liquidity across different exchanges, binance clearly leads the market with a daily volume reaching over $90.57M and an open interest of $67.39M. Meanwhile, the total daily transaction data shows a tight battle where large orders recorded a small net outflow of around minus 81 thousand UNI coins. This is normal since daily price movements are having a healthy minor drop in the 3% range across almost all main exchanges before finding new strength.
From a long term fundamental view, the supply distribution profile gives peace of mind for market players. Based on the allocation details, the biggest share is held by the team at 38.66% followed by investors at 32.81% and the community at 27.28%. Interestingly, the locked coin supply has now dropped to hit 0.00% with an open circulation rate that has reached 61.58% or equal to 549,936M UNI coins that are already unlocked. This definitely cuts our worry about sudden selling pressure from big token unlocks in the future.
Technically, the price movement of UNI coin on the 4 hour chart shows a very clean uptrend. The price moves steadily above the rising trendline and stays firmly above the 50 SMA indicator at the $3.39 level. When the price is around the $3.57 level, the stochastic indicator shows a number near 30 which means the market is already very close to the oversold area, giving an interesting buy signal for traders looking for a good entry point.
Looking at a wider view on the daily or 1D chart, the long term recovery direction of this coin looks clearer with the current price at around $3.59, which stands firmly above the daily 50 SMA line at the $2.97 level. The stochastic indicator on the 1D chart also shows strong bullish momentum at 71.74 and 65.91. However, the buyers still have to pass a few important hurdles above. We can see that the nearest resistance area is in the $3.98 to $4.13 zone, while the second resistance area, which is the next target up, is in the $4.73 to $4.88 range.
My Opinion
In my opinion, the mix of big changes in tokenomics moving to a deflationary system and a recovering chart structure is a strong sign that this coin is getting ready for a big jump. When a giant protocol with millions of dollars in daily revenue starts actively burning their own token supply in the market, the scarcity effect will slowly but surely push up the real value of the token. This is not just a short term trend hype, but a solid base that long term market players are looking for to secure their positions before the next volatility comes.
If we look at the big picture, the success of holding the rising trendline inside global market swings shows that buying interest at the lower price area is still very thick and well planned. We must stay objective in watching price movements around the first defense zone, because success in breaking through that limit will be the key to opening the way for a much stronger bullish trend. I think that this smart step of expanding fee collections to various new networks will be the main catalyst to push the price out of its long sideways phase.
Source
- Uniswap Labs Proposes Expanding Protocol Fees to V4 Pools With New Fee Controller System
- Cointelegraph
- Whale Factor
⛔Disclaimer - This analysis is for educational purposes and reflects personal opinion only, not financial advice. Always practice risk management and use stop losses (SL) according to your own risk tolerance.
Posted Using INLEO
