Uniswap (UNI) is up nearly 50% as traders flock to DEXs after China’s purge
Uniswap (UNI) has rallied sharply from the crash last week when China decided to step up its crackdown on Bitcoin and crypto by declaring that all crypto transactions are illegal.
UNI price rose 15% on Monday (September 27) to hit an intraday high of $ 26.26. UNI’s profits come a day after falling to a monthly low of $ 17.63. As a result, it has returned over 48% for investors who bought the dip within the last 24 hours.
UNI serves as a governance token in Uniswap’s decentralized exchange (DEX) ecosystem. As a result, UNI owners can vote on issues that will help guide the direction of Uniswap’s future direction.
In addition, UNI holders can also receive a share of potential future income. Uniswap’s governance contract contains a so-called “fee conversion” for strangers. When this option is enabled, UNI holders can earn part of the protocol’s fees.
Some users have generated income by contributing to Uniswap’s liquidity pool and making between 0.05% and 1% of the value of each trade in the current model.
Uniswap. Liquidity Pool Chart | Source: Uniswap
Therefore, the growth prospects of Uniswap as DEX could continue to point to a UNI adoption curve. And so it seems that China’s stepped-up crackdown on the crypto industry has made UNI more attractive to speculators.
The People’s Bank of China (PBoC) and other government agencies held cryptocurrency transactions illegal in a notice released on Friday, September 24th. Meanwhile, they also targeted foreign cryptocurrency exchanges, warning that it is illegal to offer online trading services to Chinese citizens and that exchange workers could be prosecuted.
The move aims to fill a void that remained after the PBoC banned all regional financial institutions from providing services to crypto businesses. During this time, Chinese traders continued to use foreign but domestic cryptocurrency exchanges such as Huobi, Binance, and OKEx.
However, DEXs like Uniswap are trying to move away from state jurisdictions by replacing the custody model with a non-custody model based on smart contracts and multi-signature technology.
As a result, trading trends on Uniswap have recently appeared in sync with rallies on its competing DEXs, as shown in the Messari index below.
Uniswap and SushiSwap led the growth of DEXs over the past 24 hours | Source: Messari
Overall, the 60 DEX tokens rose 10.27% on September 27 at 7:00 p.m. KST in an adjusted 24-hour timeframe. Meanwhile, the gain of 13 Centralized Exchange Coins (CEX), including Binance Coin (BNB) and FTX Token (FTT), reached just 0.77% over the same period, showing a strong FOMO level among traders.
Growth in centralized exchange tokens over the past 24 hours | Source: Messari
UNI Technical Analysis
The UNI price traded lower within a parallel descending channel that appears to be the “handle” of the classic technical pattern of cup and handle.
This pattern occurs when an asset forms a rounded bottom (cup) while correcting upward after a solid rise. Once the process is complete, it tends to fall into the descending channel area, often leading to a bullish breakout.
On such a surge, the asset will set a bullish target at a distance equal to the depth of the cup.
UNI price table daily frame set with cup and handle pattern | Source: TradingView
In the last few meetings, UNI marked almost all the factors involved in creating a cup and handle pattern. It is currently looking to break out of the descending processing channel area with the profit target at $ 17.83 above the cup resistance of $ 48.54.
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According to Cointelegraph