Uniswap, one of the leading decentralized finance (DeFi) platforms, has seen a significant surge in trading activity, surpassing $88 billion in volume for May. This achievement marks the highest monthly total since January, largely driven by a positive sentiment stemming from recent news regarding the U.S. Securities and Exchange Commission (SEC). Chair Paul Atkins indicated that the SEC is drafting an “innovation exemption” for DeFi, fueling optimism among investors.
The price of Uniswap’s native token, UNI, recently broke through the local resistance of $7.55 following two days of considerable buying volume. This breakout suggests that a potential long-term uptrend might be in the works. The one-day price chart indicates a decisive move above previous resistance levels at $6.62 and $7.55, highlighting bullish intent as the price rally continued.
Despite the bullish momentum, traders should note some caution signs. The On-Balance Volume (OBV), which reflects trading volume and demand, has shown volatility over the past six weeks. However, it reached a new high recently, indicating strong demand for UNI.
In contrast, the Chaikin Money Flow (CMF) presents a warning, currently reflecting capital outflows with a reading of -0.05 since the early May rally. The CMF assesses money flow over a 20-day period, differing from the cumulative nature of the OBV. Overall, while the recent price action and moving averages suggest bullish momentum, traders should monitor the 50-day moving average, which has served as a reliable support level.
If this support is breached, traders may need to adjust their strategies accordingly. Please note that the information provided here should not be considered financial advice and reflects the writer’s personal views.