In a bullish move, Uniswap’s native token, UNI, broke past the $6 threshold after a governance proposal, titled the ‘UNIfication,’ began gathering significant momentum within the community. This development has sparked renewed interest in the decentralized finance space and has traders analyzing the potential impact of this proposal on UNI’s price trajectory.
Overview of the UNIfication Proposal
The UNIfication proposal aims to introduce protocol fees across Uniswap v2 and some v3 liquidity pools. These fees would subsequently be used to burn UNI tokens. Additionally, the proposal includes a retroactive burn of 100 million UNI tokens to simulate what would have been burned had the system been active since the token’s launch in 2020. The voting period for this landmark decision is expected to conclude on December 25, with discussions heating up as the market reacts to its implications.
Price Action Since Proposal Announcement
Since voting began on December 20, UNI has rallied over 16%, climbing from $5.30 to $6.16 at press time. A bullish daily close above $5.97 has re-established positive sentiment for traders, with analysts identifying the $5.33–$6.05 range as a key demand zone. For traders, this could mean an opportunity to buy while eyeing a potential upward movement towards $7, a historical resistance level poised to be revisited.
Key Indicators Supporting UNI’s Momentum
Technical indicators further bolster the case for continued upward movement. The Awesome Oscillator is on the verge of completing a bullish crossover, indicating that buying momentum may soon dominate. However, a minor concern is the lack of new highs in the On-Balance Volume (OBV) indicator, hinting at slight weaknesses in buying pressure. Despite this, price action remains the primary focus as market structure firmly holds its bullish tone.
Trading Strategy for UNI
Experts suggest that traders aim to buy during dips, particularly if UNI retraces toward the $5.60–$5.86 range, as indicated by liquidation heatmaps. With a bullish structure in place, a move targeting $7 seems plausible in the short term. However, caution is advised, as a dip below $5.33 could invalidate this bullish outlook.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Make informed decisions after conducting your own research.
