14 JAN 2022 (FRI)- Uniswap (UNI) Report Card

14 JAN 2022 (FRI)- Uniswap (UNI) Report Card

By quantdoge | Daily Crypto Risk Report | 14 Jan 2022


Investment Disclaimer:

  • I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
  • Past performance presented here is not an indicator of future performance.
  • This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post.
  • I do hold a long position in UNI as a token holder.

1A. Top Good News for UNI HODLERS !!!

2. How Uniswap Performs Relative to Other Cryptos ?

Performance of All Cryptos Under Quantdoge Watchlist in 2021 (Sorted by % Return)

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UNI has undergone 215.03% return from USD 5.1711 to USD 16.2905 since 01 Jan 2021. UNI is the 22th best performing crypto assets among others here.

3. How Resilience Uniswap Is Towards Bitcoin Crash Relative to Other Cryptos ?

Historically, all altcoins are somewhat dependent on Bitcoin price movement and it’s often the case where if Bitcoin falls, most altcoins would follow.

Top 3 Cryptos That Are Most Resilient To Bitcoin Crash During Each of BTC 4 Largest Crashes in 2021

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UNI has proven resilience against BTC crash in 0 out of the 4 instances.

During the last 4 BTC market crashes,
When BTC dropped by -13.47 %, UNI returned -32.94 % at 20 May 2021,
When BTC dropped by -13.13 %, UNI returned -15.44 % at 22 January 2021,
When BTC dropped by -12.16 %, UNI returned -2.97 % at 13 May 2021,
When BTC dropped by -11.39 %, UNI returned -23.28 % at 22 June 2021

4. Technical Analysis on Uniswap

4.1. Volume Weighted Average Price (VWAP)

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VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when UNI is closed at the end of every single day. 

Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of UNI (blue line) to fall to its average level (orange line).

Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of UNI (blue line) to rise to its average level (orange line).

As of 13 Jan 2022, VWAP is suggesting that UNI is losing momentum and currently being traded below its volume-weighted average price.

4.2. Moving Average Convergence Divergence (MACD)

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MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).

MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of UNI closing price from its 12-day EMA. 
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26). 

As MACD (12, 26) goes higher away from Signal (9), it signifies that UNI is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that UNI is losing momentum. 

As of 13 Jan 2022, MACD is suggesting that UNI is losing momentum and currently being traded below its signal line.

4.3. Bollinger Band

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Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:

- SMA (20) (blue line), which is the 20-day simple moving average price of UNI
- Upper Band (orange line), which is computed by adding 2 standard deviations of UNI on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of UNI from SMA (20)
- Close (green line), which is the daily closing price of UNI

Whenever close line (green) touches the lower band (red), it indicates that UNI is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that UNI is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 13 Jan 2022, Bollinger Band is suggesting that UNI is being oversold and currently trading near the lower band (i.e. undervalued zone). 

4.4. Relative Strength Index (RSI)

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Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that UNI is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that UNI is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 13 Jan 2022, RSI is suggesting that UNI is neither oversold nor overbought.

4.5. Price and Volume Analysis

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Uniswap suffered a large sell-off in the earlier December 2021 on 04 Dec 2021, where its price has seen dropping sharply from USD 23.03 high to USD 13.08 low. UNI price has been range-bound between USD 14 and USD 20 since this Dec sell-off without rising through the USD 20.50 threshold at any single day.

Uniswap's daily active trading volume also decreases, and one of the explanations are likely the rise of other Layer 1 blockchains and the decentralized exchanges (DEXs) that built on them, like Trader Joe which is built on Avalanche and Raydium which is developed on Solana. These blockchains offer transaction speed and gas fees which are way lower than Ethereum, and as ETH users slowly migrate to other L1 blockchains, the trading volume and hence trading fees which are one of the key determinants of UNI price would indirectly being affected too. Uniswap's recent integration with Polygon however, could be a game charger. 

Based on the technical analysis presented above, quantdoge is neutral on UNI, but I could be wrong, hence please make your careful due diligence before making any financial decision.

5. Uniswap Risk Profile

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Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Uniswap defined above, UNI seems to trade at a similar risk level on 13 Jan 2022 as compared to 10 days before on 03 Jan 2022, with its biggest pullback being seen at - 14.94% on a single day during the last 100 days. However, I could be wrong, hence please make your careful due diligence before making any financial decision.

6. Price Simulation for Uniswap

How did quantdoge simulation perform vs the actual UNI price movement over the last week ?

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Over the last 7 days, UNI is trading below the median range but above the lower 25th quantile range of all quantdoge simulations, indicating that UNI is slightly oversold. 

7. UNI Community Analytics

Number of UNI Followers In The Last 30 Days
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In the last 30 days alone, Uniswap followers have increased 5.82% on Twitter from 760,588 to 804,850 and grown 2.12 % from 58,807 to 60,054 on Reddit.

Daily increment of Uniswap Twitter followers peaked on 13 Jan 2022 and its daily increment of Reddit followers peaked on 03 Jan 2022.

There are on average 1,699 new followers daily on Uniswap Twitter and 43 new subscribers daily on its Reddit.

8. Google Trends Analytics

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uniswap reached its peak in Google Search on 2021-05-09 with a Google Score of 100
Over the last quarter, uniswap Google Score has decreased 36.31 % from 44.75 to 28.5
Over the last 6 months, uniswap Google Score has increased 63.79 % from 17.4 to 28.5

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Over the last month, uniswap is most saught after on Google from Gibraltar, followed by Cayman Islands and St. Helena.

These 3 British Overseas Territories are wealthy islands which offer low taxes to their residents and famous for their offering of offshore banking services to high-net-worth individuals and hedge funds. A high interest from these islands could mean that Uniswap is being used more often by institutional traders as compared to retail traders.

This theory is further being supported by PwC 2021 Crypto Hedge Fund Report which found that Uniswap is the most used DEX by crypto hedge funds in 2021.

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(Extracted from PwC 3rd Annual Global Crypto Hedge Fund Report 2021)

Conclusion

If you are interested to explore more about Uniswap, one of the easiest ways is to acquire Uniswap native governance token, UNI, where as token holders, you get the rights to vote on all governance proposals on Uniswap DAO.

Crypto.com offers a user-friendly and nicely designed platform for you to purchase UNI fast and secured. New users who join Crypto.com are entitled to 0% credit/ debit card fees when purchasing your crypto with Crypto.com for the first 30 days.

If you are interested in signing up an account/ getting a Visa card with crypto cashback rewards from Crypto.com, you may sign up with quantdoge referral link as follow:

https://crypto.com/app/j2dc67xe82

with the referral code of j2dc67xe82 , where both of us would get USD 25 once you stake for a Ruby card or above.

If you like my analysis and articles, please follow me at @quantdoge for daily updates.

Follow My Twitter for daily updates: https://twitter.com/quantdoge 

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quantdoge
quantdoge

Data scientist in crypto and blockchain space.


Daily Crypto Risk Report
Daily Crypto Risk Report

This blog was created by quantdoge, a data scientist in the cryptocurrency and blockchain space to publish daily risk reports on different cryptocurrencies. All published reports in this blog were analyzed with in-house algorithmic trading and quantitative risk management technology. ** Investment disclaimer: ** I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.

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