Earlier today, Yearn.finance (YFI) and Ether (ETH) rose sharply after Uniswap’s control token UNI plunged 22% from $ 8.00 to $ 6.80.
Snapshot of the daily market performance of cryptocurrency. Source: Coin360
Launched less than 48 hours ago, UNI has grown from about $ 1.00 to $ 8.00 in a short space of time. After an impressive eight-fold win, the token began to retreat, but trading volume suggests that traders have been looking at higher prices.
YFI and ETH came together when UNI was corrected
When UNI began to make a parabolic rally from $ 1
Traders, most of whom were on FTX exchanges, severely short-circuited UNI pending a strong withdrawal. These merchants might have thought that most of the holders of the 400 UNI tokens UniSwap sent to their users would want to make money after their value reached $ 2,640.
The opposite happened as within 5 hours of launch, Binance, Coinbase Pro and FTX listed UNI. This marked the fastest list among the three best exchanges for a newly launched token and has led some cryptocurrencies to question whether exchanges violate their own listing policies in the pursuit of quick profits.
The rapid listing of these exchanges caused demand for UNI to increase and the negative funding ratio on FTX further pushed up the rally as holders of short-term contracts were driven out of their positions.
Eventually, the token peaked at around $ 8.60 on Binance and was followed by a 22% correction where the price consolidated in the $ 6.50 range before returning to $ 7.00. When this happened, the price of YFI rose by 10.72% from $ 31,158 to $ 34,509.
The inverse correlation between YFI and UNI. Source: Hsaka, TradingView.com
Ether also rose slightly by more than 1% immediately after the price of UNI fell.
Hsaka, a popular cryptanalyst on Twitter, pointed out what he calls an inverse correlation between UNI and larger DeFi tokens such as YFI. According to him, this shows that many DeFi users traded with UNI, but as soon as UNI peaked, the profit cycled back to DeFi tokens, with YFI as the main recipient.
Top retailers’ views on the UNI rally and sharp correction
While UNI’s sudden rise surprised many investors, some traders expected the steering token to gather.
A pseudonymous analyst known as “DC Investor” said that as the most used app on Ethereum, UNI’s strong results were not a surprise. He said:
Can not comment much on the price in the short term. But I guess I’m just amazed that people are amazed at UNI raging. The most used app, charges larger than Bitcoin, makes the volume larger than many CEX devices, and one of the best demonstrations in Ethereum. Learn to see and buy the real ones. ”
Another popular crypto-Twitter trader known as “Crypto Medici” said that UNI is still probably undervalued and in the long run he expects a valuation of 3 to 5 billion dollars. The trader noted:
“UNI will be worth $ 3-5 billion (conservative) Still extremely undervalued. Token distribution was a genius and many who sold it will return FOMO when we break $ 1 billion. This is before V3 comes out and liquidity shortages ramp up. ”