- The demand for self-care is spurring more Uniswap tools.
- The long-term outlook for UNI has improved after the events of the past week.
Uniswap just announced that the number of users on its web application recently rose to a new high in 2022. This result is unsurprising given that recent events have shown that many centralized exchanges may not have enough reserves.
Read about the Uniswap (UNI) price forecast 2023-2024
Hence, cryptocurrency users moved their cryptocurrencies off the exchanges. As a result, decentralized exchanges (DEX) such as Uniswap have seen increased activity.
Uniswap’s latest post acknowledges that the demand for self-care and transparency solutions has increased. As a result, decentralized exchanges have gained more users.
New users of the Uniswap web app peak in 2022.
There is a demand for self-care and transparency and users flock to what they know and trust.
Let’s keep building. pic.twitter.com/IwPqTmx58J
Uniswap Labs 🦄 (Uniswap) November 14, 2022
The main reason traders have turned to DeFi is that FTX has sowed the seeds of mistrust towards centralized exchanges. It has become clear to traders that holding cryptocurrencies on exchanges may not be ideal. If more traders turn to DEXs, we may see an explosion of utility for DEXs during the next bull run.
Uniswap’s short-term results already confirm that the number of addresses using DEX has increased. The number of non-zero balance addresses transacting on UNI has increased steadily this month. They were at their highest level in the past three months, at the time of writing.
Source: Glassnode
New addresses and active addresses have seen good growth since mid-October. It recently peaked near mid-November, after which it oscillated. The upward trend is due to demand returning from recent lows. The fluctuation of both active addresses and new addresses is confirmation of lower demand in the short term.
The reported increase in Uniswap usage may be short-lived based on the above observations. Measures of volume and transactions in the DEX confirm that there has indeed been a sharp increase in transactions and volume this week. But the metrics themselves have fluctuated just as quickly.
Source: Glassnode
It is worth noting that both volume and transactions managed to reach 3-month highs this week. This indicates that there will be more activity this week and this may be due to investors moving into DEFI.
Impact on UNI price metrics
We are likely to see a repeat of the same over the long term if investor demand continues to favor the DEX.
Such an outcome would benefit the growth of the Uniswap network in the long run while benefiting from UNI demand. UNI price increased 36% from last week’s lows to Tuesday’s highs (November 15th).
Source: TradingView
UNI’s 50-day moving average recently formed a golden cross with the 200-day moving average. This is a traditionally bullish sign. We could see more upside if the price manages to cross above the two moving averages.