Uniswap Labs has unveiled the latest version of its protocol, Uniswap v4. The primary goal of this upgrade is to reduce costs and introduce new functions to enhance the platform’s position in the decentralized exchange (DEX) market.
DeFiLlama’s data indicates that Uniswap v4 has quickly gained momentum, reaching a total value locked (TVL) of $5.7M within just one day of its launch. Despite this achievement, the introduction of v4 has not yet led to a price surge for UNI. As of the latest update, the altcoin was trading at $11.68 with a 2% decrease over the past 24 hours.
Uniswap Unveils Its Most Significant Version to Date
Uniswap Labs’ CEO, Hayden Adams, has described v4 as the “biggest and most powerful version” of the Uniswap protocol so far. Adams emphasized that this version has undergone several years of development and will introduce groundbreaking functionalities. One notable addition is a developer platform named Hooks, designed to expedite development cycles and enhance liquidity on the platform.
Additionally, Uniswap v4 is set to significantly reduce the deployment costs of liquidity pools by 99.99%. The new version will also provide native support for Ethereum (ETH), which will be particularly cost-effective for users dealing with ETH pairs. In Adams’ words,
“v4 is poised to act as the fundamental liquidity infrastructure for Ethereum in the years ahead – I anticipate witnessing the remarkable innovations our developer community will construct on top of it.”
Uniswap v4 is accessible on Layer one networks like Ethereum, Avalanche, and BNB Chain. It has also been rolled out to Layer twos including Base, Optimism, Arbitrum, and Polygon.
Will the Latest Protocol Version Impact UNI’s Performance?
Uniswap has been encountering selling pressure as indicated by rising selling activities. According to CryptoQuant, UNI’s exchange reserves have surged to 71 million tokens, marking the highest level in over a month.
This surge in exchange reserves could signify diminishing confidence as traders prepare to sell, potentially exerting further downward pressure on UNI’s price movement.
Despite this, the launch of Uniswap v4 seems to have piqued the interest of whales or prominent holders. Large transactions increased from 4.01M UNI to 15.64M UNI within a 24-hour period, according to IntoTheBlock.
A majority of these transactions were associated with buying activities, evident from the rise in netflows of large holders from -47,900 UNI to 3.03M UNI. This surge indicated that whales accumulated 3.07M UNI tokens just yesterday, with an approximate value of $33M.
Should whale accumulation suffice to counteract the pressure from selling activities, it could bode well for UNI’s performance. Furthermore, if these large holders are acquiring tokens in response to the enhanced features provided by Uniswap v4, it might set the stage for a prolonged uptrend in the market.
Crucial Levels to Monitor
At present, the daily chart of Uniswap suggests a predominant bearish sentiment, attributable to the Relative Strength Index’s proximity to the oversold territory. Furthermore, a negative value in the Chaikin Money Flow (CMF) indicator indicates substantial selling pressure across the market.
Traders should keep a close eye on the potential crossover signaling the Signal line moving above the RSI line, indicating a buy signal.
Additionally, UNI has shown strong resilience at the $10.80 support level. A breach below this threshold could trigger a notable downturn. Conversely, surpassing the $15.25 resistance level might pave the way for a significant bullish trend.