The XRP lawsuit against the United States Securities and Exchange Commission has been going on for almost 9 months now. With new developments occurring frequently, the case shows no signs of concluding anytime soon. And now the largest decentralized exchange, Uniswap and its developers, are now under the radar of the SEC.
As pointed out in a previous report, the SEC examines how investors use Uniswap, how it is marketed, and its operating procedures. The investigation is still in its infancy for now and is unlikely to lead to formal prosecutions anytime soon. However, as soon as the aforementioned news broke, it had a huge negative impact on the token.
The price of Uniswap had increased by almost 20% in the three-day period between August 30 and September 1. However, the DeFi token has lost almost 11% of its value since then. At the time of writing, UNI’s valuation was exactly one dollar lower than the benchmark of $ 30.
So, in the midst of this lingering regulatory uncertainty, should UNI traders change their strategies or would it be better to stick to their original goals?
Assessment of the current state
Well, UNI’s state of on-chain metrics depicts a number of emerging trends at the time of writing. For starters, Glassnode’s data regarding the number of active addresses depicts a fascinating trend.
This metric was at its lowest for a month  towards the end of August. However, the same has seen a dramatic increase over the past two days and explicitly stood at 2,573 at the time of writing.
Well, does this unexpected increase in the number of active addresses mean that dormant users have made withdrawals after familiarizing themselves with the aforementioned SEC-related development? To answer the question, it becomes essential to do a temperature check and see whether or not the UNI market has been under excessive selling pressure lately.
Interestingly, at the time of writing the net foreign exchange flow has remained negative [-412k]. The same essentially indicated the emergence of buying interest and pointed out that UNI tokens were being moved from exchange wallets to private wallets and cold rooms.
Additionally, according to IntoTheBlock data, buy orders have exceeded the number of sell orders in recent times. For example, in the past 12 hours, over 200,000 additional UNI tokens have been purchased.
On top of that, most traders remained bullish on the token’s short term outlook. For example, the funding rate on all major exchanges, overall, has remained positive. The same on Binance, Phemex, and OKEx, reflecting values of 0.08%, 0.15%, and 0.07% respectively, at the time of writing.
Current levels imply that long traders were funding or paying short traders, and the same sign is bullish for the price of UNI.
In addition, few changes were observed in perpetual open interest swaps. As the chart above shows, they’ve been hitting well above $ 420 million lately. This means that new money is pouring more or less at the same rate into the UNI market as before.
The total value locked, on the Uniswap protocol has also increased. Oddly enough, the same stood at its 3-month high [$7.2 billion] at the time of writing. Overall, this indicates that the overall health of the UNI market has been good in recent times.
Apart from the initial setback, the UNI market has managed to get back on track. With the not-so-deviated state of most metrics in mind, short-term traders can stick with their usual trading strategies and have nothing to worry about at this point.