The price of UNI, the governance token of the Uniswap decentralized exchange, has surged by 46% to trade above $17, reaching levels last seen in January 2022. This rally is accompanied by a significant increase in trading volume, which has jumped by 120% in the past 24 hours to $1.18 billion. As a result, UNI’s market capitalization has risen by 44% over the past week to $9.4 billion, making it the 16th largest cryptocurrency by market capitalization.
The surge in UNI’s price follows a proposal by the Uniswap Foundation to upgrade the protocol’s governance for fee redistribution, with the goal of increasing community involvement. The upgrade will focus on distributing protocol fees to UNI token holders. This proposal has been well-received by the Uniswap community as it enhances the governance structure of the protocol and gives token holders a more active role in decision-making processes.
Snapshot voting for the proposal started on March 1 and will remain open until March 7. So far, the proposal has received significant support from the community, with 55 million UNI (100% of the vote) agreeing to the upgrade.
In addition to the governance upgrade, there are other factors driving the demand for UNI. Data from Lookonchain shows that a whale has accumulated UNI tokens worth over $12.5 million in the last 48 hours. Furthermore, Uniswap’s network activity has been increasing, with the number of daily users growing from around 75,000 in October 2023 to 168,106 on March 2. This indicates a growing adoption of the Uniswap ecosystem, which in turn increases the demand for UNI tokens.
As a result of these positive developments, the price of UNI has reached 26-month highs, surging by over 143% from a low of $7 on Feb. 23 to an intraday high of $17.03 on March 6. The relative strength index (RSI) confirms the dominance of buyers in the market, with a reading of 87. However, the RSI also indicates that UNI is currently overbought, suggesting a potential trend reversal and the end of the token’s bull rally. It remains to be seen whether buyers will be able to push the price of UNI higher to retest the $17 level and confront resistance at $20.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment and trading decisions.