Uniswap remains a significant player in the decentralized exchange (DEX) sector, particularly following the launch of its chain. These developments have steered it to institutional recognition with an exchange-traded fund (ETF) on its way.
The past 24 hours have seen the altcoin follow the wider market trend, with the altcoin losing 15% of its cap. In fact, its weekly losses amounted to over 25% at press time. Despite positive daily trading volume figures.
In the context of volumes, will the ETF hype drive more activity and help reverse the altcoin’s price struggles?
Bitwise files for Spot Uniswap ETF
As per the U.S Securities and Exchange Commission (SEC), Bitwise recently filed an S-1 for a Spot Uniswap ETF. This became the first formal attempt to get an ETF for UNI, where the fund would track the token directly.
According to the filing, it is clear that the staking feature would not be available at launch. However, Bitwise believes that the situation could change later. In case the SEC approves it, Coinbase would be the custodian.
The aforementioned update brings traditional finance closer to investing in Uniswap. Especially since the ETF hype could have had a hand in the 89% hike in daily volume.
In terms of the total volume traded over the past month, more than $74 billion hit the DEX protocol. This represented an average of more than $2 billion per day with a spike of about $200 million after the ETF news.
Hence, it could have a similar impact in the long run. Should it receive approval, investors with greater confidence in the altcoin could inject more volume into the market.
While the update has affected trading volume, it remains unclear if the same will have an impact on UNI’s price action.
Will the hype stop UNI’s price decline?
Uniswap’s price has been breaking the market structure to the downside since late November. Only one stint has had a run to the upside, which happened between 18 and 20 December.
The Market Structure Break and OB Probability Toolkit indicated that there may be three high-opportunity zones for shorting the altcoin. These zones were at $5.394, $4.854, and $4.707 at press time, as the price would still be in bear territory. The seller momentum, evident in the MACD indicator, confirmed this observation.
Interestingly, the MACD bars have been losing their density lately – A sign that ETF hype may have had a slight impact. However, this was yet to be confirmed as a majority of the indicators were biased on the sell side.
These technical factors make a potential reversal to the upside harder. Unless the broader market also recovers over time.
Final Thoughts
- Bitwise has filed for a Spot Uniswap ETF, resulting in a $200M hike in daily trading volume.
- Despite the ETF hype, the altcoin’s price action has seen no sign of reversal yet.
