UMA (DeFi) Protocol Outlook Ahead
Updated
❇️UMA Fundamentals;
UMA Protocol is a Decentralized Finance (DeFi) Protocol on Ethereum for any two counterparties to create their own financial contracts and synthetic assets.
The protocol uses a model known as Total Return Swap, which is a bilateral contract where one counterparty pays the total return of a specific underlying asset, including interest payments or dividends and any capital appreciation or depreciation. Conversely, the opposing counterparty pays a regular fixed cash flow. The underlying asset is commonly called a reference asset, and the swap is settled and terminated at a specific date in the future.
The UMA token is primarily used for protocol governance and grants the token holder the right to vote on governance decisions such as upgrades to the Data Verification Mechanism (DVM), creating new synthetic assets and settling disputes on liquidated collateral.
UMA is designed to power the financial innovations made possible by permissionless, public blockchains, like Ethereum . Using concepts borrowed from fiat financial derivatives, UMA defines an open-source protocol that allows any two counterparties to design and create their own financial contracts. But unlike traditional derivatives, UMA contracts are secured with economic incentives alone, making them self-enforcing and universally accessible.
☑️The latest losses in the UMA market has also followed its association with SushiSwap, a fork of Ethereum-based decentralized exchange (DEX) Uniswap. Ahead of its rally, the founder of SushiSwap had asked users to swap Ethereum for UMA at UniSwap. He further asked the so-called yield hunters to earn SUSHI tokens by transferring UMA from UniSwap’s liquidity pool to its own.
Nevertheless, after the founder exited the SUSHI market following a strong price rally, traders started assuming SushSwap as an exit-scam. The anonymous creator returned later with a name and refuted the allegations. He returned the $14 million worth of ETH that he had secured from the Sushiswap reserves.
The price of SUSHI soared by more than 25 percent after that.
But UMA had suffered damage until then. It is now likely for the token to recover its recent losses now that the dust of Sushiswap is behind. And if it doesn’t recover, then $10 appears like a first target that may excite bulls into purchasing UMA.
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❇️Technical Outlook Ahead
If bears remain persistent, then UMA/USDT may likely continue their downtrend inside the Descending Channel while targeting certain levels on its way south.
That brings $8.38 as the next potential downside target, also because of its brief history of guarding one bias against the other. If the price moves below it, then traders could extend their bearish target towards $6.38.
In the meantime, UMA/USDT would keep testing the lower trendline of the Descending Channel as its support. If the pair bounces back, it would do so towards the upper trendline of the Channel, followed by a repeated breakout attempt above the $20 range.
As it happens, the market would need to claim the 61.8% level of its bigger Fibonacci Graph to establish a bullish reversal
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👉This analysis is my personal opinion and you are responsible for your own trades or invests.
❤️with Best Regards and successful trades.
UMA Protocol is a Decentralized Finance (DeFi) Protocol on Ethereum for any two counterparties to create their own financial contracts and synthetic assets.
The protocol uses a model known as Total Return Swap, which is a bilateral contract where one counterparty pays the total return of a specific underlying asset, including interest payments or dividends and any capital appreciation or depreciation. Conversely, the opposing counterparty pays a regular fixed cash flow. The underlying asset is commonly called a reference asset, and the swap is settled and terminated at a specific date in the future.
The UMA token is primarily used for protocol governance and grants the token holder the right to vote on governance decisions such as upgrades to the Data Verification Mechanism (DVM), creating new synthetic assets and settling disputes on liquidated collateral.
UMA is designed to power the financial innovations made possible by permissionless, public blockchains, like Ethereum . Using concepts borrowed from fiat financial derivatives, UMA defines an open-source protocol that allows any two counterparties to design and create their own financial contracts. But unlike traditional derivatives, UMA contracts are secured with economic incentives alone, making them self-enforcing and universally accessible.
☑️The latest losses in the UMA market has also followed its association with SushiSwap, a fork of Ethereum-based decentralized exchange (DEX) Uniswap. Ahead of its rally, the founder of SushiSwap had asked users to swap Ethereum for UMA at UniSwap. He further asked the so-called yield hunters to earn SUSHI tokens by transferring UMA from UniSwap’s liquidity pool to its own.
Nevertheless, after the founder exited the SUSHI market following a strong price rally, traders started assuming SushSwap as an exit-scam. The anonymous creator returned later with a name and refuted the allegations. He returned the $14 million worth of ETH that he had secured from the Sushiswap reserves.
The price of SUSHI soared by more than 25 percent after that.
But UMA had suffered damage until then. It is now likely for the token to recover its recent losses now that the dust of Sushiswap is behind. And if it doesn’t recover, then $10 appears like a first target that may excite bulls into purchasing UMA.
------------------------------------------------------------------------------------
❇️Technical Outlook Ahead
If bears remain persistent, then UMA/USDT may likely continue their downtrend inside the Descending Channel while targeting certain levels on its way south.
That brings $8.38 as the next potential downside target, also because of its brief history of guarding one bias against the other. If the price moves below it, then traders could extend their bearish target towards $6.38.
In the meantime, UMA/USDT would keep testing the lower trendline of the Descending Channel as its support. If the pair bounces back, it would do so towards the upper trendline of the Channel, followed by a repeated breakout attempt above the $20 range.
As it happens, the market would need to claim the 61.8% level of its bigger Fibonacci Graph to establish a bullish reversal
-------------------------------------------------------------------------------------
👉This analysis is my personal opinion and you are responsible for your own trades or invests.
❤️with Best Regards and successful trades.
Trade closed: target reached
after about 5 month later target hited!!!
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