- Uniswap’s volume on Ethereum fell as another L2 absorbed the volume.
- UNI experienced a price correction after consecutive days of an uptrend.
According to a recent report, Uniswap’s [UNI] trading volume has declined. This downward trend prompted a look to see if the dip has affected other crucial metrics and the trajectory of the UNI token. Since trading volume often serves as a barometer of market activity and interest, the performance of the UNI token is inseparable from the health of the Uniswap ecosystem.
Read Uniswap (UNI) Price Forecast 2023-24
Uniswap volume drops, but…
from Glassnode recent reports shed light on Uniswap’s volume decline on Ethereum, especially when compared to previous years. The data showed only two notable exceptions to this trend: an increase in volume during the rising interest in Liquid Staking Tokens (LSTs) and another spike during the launch of meme tokens on the platform.
Source: Glassnode
Interestingly, the volume decline was not due to a lack of trades on Uniswap. Closer examination of the distribution of trading volume across different Layer 2 solutions, per Glassnode, led to a better understanding. A significant amount of trading activity has shifted from the Ethereum mainnet to Arbitrum.
In fact, Arbitrum attracted up to 32% of Uniswap’s trading volume from March, indicating a noticeable migration away from Ethereum. This trend continued and remained high in both June and July, providing a compelling explanation for the drop in volume on Ethereum.
Breaking Uniswap’s volume and TVL trend
The latest version of Uniswap, known as Uniswap V3, recently showed a positive volume trend. At the time of writing, according to data from Defillamaweekly trading volume for the V3 has surpassed $2.5 billion.
At the same time, Uniswap V2, the previous version of the platform, also maintained a respectable volume of around $1.2 billion. This cumulative trading volume for Uniswap V3 and V2 was close to $4 billion.
Also, according to the latest available data, the TVL on Uniswap experienced a slight decrease, currently around $3.7 billion. However, this performance showed a much improved trend compared to an earlier dip in March.
UNI starts price correction
Uniswap’s daily timeframe chart showed a clear and noticeable uptrend over the past few days. Specifically, between July 25 and August 1, UNI witnessed an impressive price increase of over 15% as indicated by the price range tool.
Source: TradingView
How much are 1,10,100 UNIs worth today
This sequential uptrend propelled the price of UNI into the overbought zone on the Relative Strength Index (RSI). However, at the time of writing, a price correction was underway, leading to a fall of more than 4% from its recent peak.
UNI was trading around $6.3 at the time of writing. In addition, the RSI line dipped below the overbought zone, indicating a potential shift in market sentiment.