Uniswap’s current trading price is $16.45, reflecting a 3% increase in the last 24 hours. The cryptocurrency UNI has been one of the top performers recently, showing a remarkable surge of over 78% in the past month.
Uniswap’s upward trend aligns with the overall recovery in the decentralized finance (DeFi) sector.
Recent data from DeFiLlama highlights that the Total Value Locked (TVL) in DeFi has reached $156 billion this week, marking the highest level since April 2022.
Aside from the booming DeFi sector, the surge in leverage usage appears to be impacting Uniswap’s recent price movements.
Record Highs in Uniswap Derivative Exchange Reserves
As reported by CryptoQuant, derivative exchanges currently hold more than 69 million UNI tokens, showcasing the highest reserves level ever recorded.
The spike in derivative reserves indicates a surge in speculative interest surrounding UNI, potentially leading to increased market volatility.
Moreover, a divergence is observed between the spot market and the derivatives market due to decreased reserves in the former.
The spot exchange reserves, depicted by CryptoQuant, are currently at minimal levels, indicating limited changes in selling activities.
If the derivatives market continues experiencing heightened activity, there might be price fluctuations due to unexpected liquidations.
Two-Year Highs in Open Interest to Market Cap Ratio
Uniswap’s Open Interest has been steadily increasing and currently stands at $326 million, showing a 3% rise in the last 24 hours.
This increment has driven the Open Interest to market cap ratio to 7.89%, which is the highest level witnessed since November 2022.
A higher ratio signifies increased leverage in the market, making UNI susceptible to significant market corrections if its price deviates significantly from derivative traders’ expectations.
However, the ratio’s current low levels indicate that while speculative interest is rising, traders remain cautious.
Uniswap Funding Rates Indicate…
The positive Funding Rates suggest that more bulls are expecting Uniswap to extend its gains rather than reverse them.
Per Coinglass data, UNI’s Funding Rates have remained positive since mid-October, signifying that traders taking long positions are willing to pay higher fees to maintain their positions.
Nevertheless, the Funding Rates for UNI have decreased from their earlier high levels, indicating a drop in demand for long positions despite the continued bullish market sentiment.