UNI - Where are we at now?
Assets covered: UNI
Metrics used: Price, MVRV 7D, Dev Activity, Coin supply on exchanges, Whale transaction count
So Q3 2021 is finally here, V3 looks to be imminent and a new ATH was made. Do we have enough to sustain this rally?
Let's take a quick at where we are at now.
After the crypto-wide correction in late Feb, UNI made the $20 levels a support and bounced off it to make yet another new ATH of $34.61 USD.
However, the price/volume divergence( increasing price and falling volume) is a growing concern as it tends to signal that there's less buyers in the space, demand is getting exhausted.
A much healthier rally would be the one that started in mid-December 2020, where we saw higher price, higher volumes as buyers step in.
Would like to see increased volume over the coming days.
Expectations are high and speculators are eagerly awaiting for the drop of Uniswap V3 ever since it was announced that it is scheduled for release in Q1 2021.
Eagle-eyed speculators are watching development activity to get an idea of when it might be released. E.g the initial spike in dev activity saw UNI kick off a rally into the start of Q1 2021.
Now that we are at the end of Q1 2021, V3 is still not released.... however.... huge spikes of Dev activity (largest one in the past 6 months) been observed around late Feb 2021, perhaps prompting an imminent V3 release?
Besides V3, March 15th is also a significant date as it's when the Fee Switch mechanism can finally be turned on by the community. You can learn more about it from their governance forum.
However, it's interesting to note that not much discussion been going on about it given that we are nearing the date.
Given that $UNI is considered a relatively "young project", we'll be using the MVRV 7D to map out the overvalued and undervalued zones over the past 3 months.
The recent two rallies saw UNI hit the overvalued zone before correcting and now we are in a neutral territory. This cooldown is good as we don't want things to overheat.
Whale transaction count, which counts the "Number of Transactions Transferring More Than 100k USD" marked the previous two local tops nicely.
Since then, things have calmed down a little. It'll be worthwhile to keep an eye on such transactions when such spikes occur.
UNI's coin supply on exchanges continue to decline even as prices soar, suggesting that people are still accumulating it, which helps to alleviate the sell pressure.
That said, we still do see spikes in Coin supply on exchanges whenever the price jumps and it usually marks a local top.
Looks like everyone's pretty much just waiting for the ninja V3 announcement, which could see a push in UNI's price. Until then, any tease or rumours, should also help the price a little.
However, the lack of new buyers and trading volume are growing concerns that the bull is getting exhausted. Also, important to note that once Uniswap runs out of "speculative juice", what is there left for speculators to work with?