Uniswap logs low trading volumes, but just on this network – BitcoinEthereumNews.com

• Uniswap’s volume on Ethereum declined as another L2 absorbed the volume.
• UNI faced 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 at whether the dip has affected other crucial metrics and the trajectory of the UNI token. As trading volume often serves as a barometer of market activity and interest, the UNI token’s performance is inextricably tied to the health of the Uniswap ecosystem. 

Read Uniswap (UNI) Price Prediction 2023-24

Uniswap volume declines, but…

Glassnode’s recent post shed light on Uniswap’s volume decline on Ethereum, particularly compared to previous years. The data showed only two notable exceptions to this trend: a surge in volume during the rise of interest in Liquid Staking Tokens (LSTs) and another spike during the launch of meme tokens on the platform.

Source: Glassnode

Interestingly, the decrease in volume was not due to a lack of transactions on Uniswap. Upon closer examination of the distribution of trade volume across different Layer 2 solutions, per Glassnode, a more comprehensive understanding emerged. A significant portion of trading activity has shifted away from the Ethereum mainnet and towards Arbitrum.

In fact, as of March, Arbitrum attracted up to 32% of Uniswap’s trading volume, indicating a noticeable migration away from Ethereum. This trend has persisted, remaining elevated in both June and July, which provided a compelling explanation for the decline in volume on Ethereum.

Breaking down Uniswap’s volume and TVL trend

The latest iteration of Uniswap, known as Uniswap V3, recently displayed a positive volume trend. As of this writing, according to data from DefiLlama, the weekly trading volume for the V3 has surpassed $2.5 billion.

Concurrently, Uniswap V2, the previous version of the platform, also maintained a respectable volume of approximately $1.2 billion. This cumulative trading volume across Uniswap V3 and V2 was nearly $4 billion.

Also, as of the latest available data, the TVL on Uniswap experienced a slight decline, currently hovering around $3.7 billion. However, this performance demonstrated a much-improved trend compared to a previous dip experienced in March.

UNI embarks on price correction

The daily time frame chart of Uniswap showed a clear and notable uptrend in recent days. Specifically, between 25 July and 1 August, UNI witnessed an impressive price surge of over 15%, as indicated by the price range tool.

Source: TradingView

How many are 1,10,100 UNIs worth today

This consecutive uptrend propelled UNI’s price into the overbought zone on the Relative Strength Index (RSI). However, as of this writing, a price correction was underway, leading to a decline of over 4% from the recent peak. 

UNI was trading at around $6.3 at press time. Additionally, the RSI line dipped below the overbought zone, indicating a potential shift in market sentiment.