The current bear market did not prevent Uniswap from maintaining robust trading volumes over the last few months. In fact, the events that took place during the weak market highlight its potential to soar further in the DeFi industry.
A recent Grayscale report on the current bear market claims that the leading centralised cryptocurrency exchanges lack depth for the major cryptocurrency pairs compared to Uniswap.
This is due to the fact that increased liquidity is its secret weapon, which helped it beat out the competition.
The last couple of months saw significant increase in selling pressure, in part due to the collapse of centralised financial platforms.
Many now consider CEFI’s staking and liquidity platforms to be more dangerous. This has aided the flow of liquidity to DeFi platforms, giving Uniswap the upper hand.
The success of Uniswap’s UNI token in the upcoming market cycle is forecasted to be boosted by the liquidity flow in favour of decentralised financial platforms.
The bear market, according to the same Grayscale study, could last at least another 4-5 months.
This suggests that UNI’s price action will continue to be muted.
UNI is still trading at £5.71 at press time, up about 92% from its 2022 lows. In the near-term, the altcoin could lose some of its gains, especially if the bear market prediction is correct.
For the time being, UNI’s support is found at the 0.382 Fibonacci retracement level.
Its short-term outlook is still unclear as the weekend approaches.
The network growth is picking up after dropping to its lowest 4-week levels this past Tuesday, which gives the bulls some hope.
UNI remains bullish in its long-term outlook, particularly in light of the liquidity flow and its prominence as one of the leading DeFi platforms.
The constant rise in mean coin age shows that UNI’s long-term performance has so far resulted in healthy gains.
However, the realised capitalisation, which hit its lowest levels in a year in July, is a different story. This is a direct consequence of the majority of investors buying the hype and facing losses during the bear market.