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Is Uniswap Going to Zero? UNI Price Drops 20% After SEC Scrutiny as This Other Coin Prepares for Exchange Launch

Is Uniswap Going to Zero? UNI Price Drops 20% After SEC Scrutiny as This Other Coin Prepares for Exchange Launch WikiBit 2024-04-12 22:31

Tim Hakki Last updated: April 12, 2024 10:31 EDT | 2 min read The price of DeFi exchange Unisw

The price of DeFi exchange Uniswap‘s native token UNI is 15% lower than it was this time last week following yesterday’s news that the US SEC may launch a potential enforcement action against it for alleged securities law violations.

UNI currently trades at $9.08, which makes for a 24-hour loss of about 2.1%. While these losses suggest more of a dip than a crash, its still the heaviest overnight depreciation by any of the 20 biggest cryptocurrencies by market cap except Toncoin (TON).

Telegram‘s cryptocurrency spin-off TON shed 3.6% overnight and currently trades for $7.13. That’s heavy when juxtaposed with the rest of the leaders performances today, but TON is still some 37.5% higher than it was this time last week, thanks to some singular rallies recently.

Source: TradingView

According to UNIs chart, token holders enjoyed remarkably steep and intense growth spurts on Friday, 23 February and Wednesday, 06 March, amidst a sustained turn-of-the-month fortnight-long rally across the market.

For UNI holders, this peaked when their token hit $16 and it has been in steady decline since, with the steepest losses posted in the last 48 hours.

According to the Relative Strength Index (RSI) readings, a sell-off, which gained momentum on the eighth peaked yesterday when the RSI bottomed down to about 20.

Since a reading of 30 is considered “oversold”, this dump appears to have been heavy, however, in the last 24 hours, the reading has risen back up to about 41, indicating buying momentum is picking up.

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Uniswap is DeFis largest decentralized exchange (DEX).

This means users can buy and sell a large inventory of cryptocurrencies as with centralized exchanges like Binance or Coinbase, but they have to self-custody their crypto.

Some see this as a barrier to entry. While it‘s not difficult to select a wallet and begin trading crypto on DEXs, it’s not as streamlined as whipping out a MasterCard, paying for it, and letting the exchange do the custodial work.

Many lost faith in letting exchanges custody their crypto after the recession in 2021/2022, when crypto companies with liquidity troubles routinely paused withdrawals to head off bank runs.

It culminated with the collapse of FTX, an exchange that had been sending billions of customer funds to its sister company, Alameda Research.

Since these revelations, there has been growing attraction around DeFi and self-custodying crypto through decentralized wallets that give them control over their own private keys, like Uniswaps.

If anything, the events of 2021 were a reminder to the industry on the importance of educating the public.

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The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.

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