For a long time, the price of Uniswap has remained stable. On a weekly basis, the DeFi token lost more than 6% of its value, while on a daily basis, the asset had already lost up to 3% of its value.
As a result, UNI was one of the few non-performing large-cap tokens this week. Uniswap once represented nearly 1% of the total market capitalization of digital currencies, but that dominance has now dropped to as low as 0.66 percent.
Despite falling prices and dwindling dominance, the number of transactions and total active addresses has recently increased significantly. At the time of writing, the former metric had reached its monthly high of 3.41k transactions.
The total number of addresses, on the other hand, was seen to be slightly lower than its monthly high of 1.99k. It was observed hovering around the 1.86k mark.
The aforementioned metrics, however, do not indicate whether market participants are purchasing or selling their tokens. However, a look at the rising average balance revealed that there was no sell-side pressure.
As a result, the transaction count and address numbers, when combined, demonstrate the growing interest of market participants.
Are bearish indicators turning bullish?
At the time of publication, the derivatives market appeared to be in good shape. For example, the funding rate on most exchanges – both CEXes and DEXes – remained positive, implying that the majority of traders supported the narrative.
According to ITB data, the OI was also very close to its monthly high at the time of writing. The high open interest rates indicate increased trader participation as well as the emergence of speculative interest.
Furthermore, the forward curve of FTX Derivatives revealed an intriguing trend. The chart below from ITB shows that the market has been in Contango for more than a month. Contango occurs when an asset’s futures price is higher than its spot price. The same thing usually happens when the asset’s price is expected to rise over time.
The curve did manage to slip slightly downwards between October 21 and 22, but it had switched directions by the time this article was written. With no signs of the market entering backwardation, UNI’s price should soon end its downtrend phase and enter its uptrend phase.
Keeping in mind the monthly ATHs of most metrics, the emerging interest, and the bullish signs, market participants expected UNI’s price to rise in the near future. If the market supports their narrative, the DeFi token should be able to move closer to $30 and beyond in the coming week.