Key Takeaways
- UNI Price Jumps 6.31% despite a lawsuit from Bprotocol Foundation accusing Uniswap of patent infringement.
- The lawsuit alleges Uniswap Labs used Bancor’s patented smart contract tech since V1 without permission.
- UNI’s 30-day MVRV ratio has hit 10.05%, suggesting more unrealized profits and room for price growth.
- A high +DMI of 30.55 versus -DMI of 13.57 on the 4-hour chart confirms bulls are firmly in control.
UNI, the governance token of the Uniswap decentralized protocol, has surged above $6 again. Last Wednesday, Uniswap’s price was on the verge of hitting $8, but later faced rejection, which pulled it down below $6 over the weekend.
But today, the cryptocurrency’s value is up 6.31%. This comes hours after Bprotocol Foundation, the non-profit arm of the Bancor Protocol, sued it.
In this analysis, CCN reveals why this has happened and what could be next for UNI’s price.
Legal Trouble? No Problem for the Token
In a May 20 press release, Bancor announced it has filed a lawsuit against Uniswap Labs and the Uniswap Foundation. It accused them of infringing on its patented smart contract technologies for decentralized trading.
Bancor stated it developed the innovative contract structure in 2016 and filed a provisional patent application the following year, claiming full ownership of the rights.
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According to the company, Uniswap’s V1 launch violated its intellectual property by using the invention without proper authorization. Now, it is seeking compensation for unlicensed use of its technology.
“For the last eight years, Uniswap has been using our patented technology in its projects without our permission. As a result, we have taken legal action to defend our technology for the good of the entire DeFi community.” Mark Richardson, Project Lead at Bancor, said about the matter.
Despite the controversial circumstances, Uniswap’s price climbed to $6.32. The 30-day Market Value to Realized Value (MVRV) ratio has risen to 10.05%.
The rise in the MVRV ratio indicates more unrealized profits for UNI holders. The MVRV displays the level of market profitability and also shows whether an asset is undervalued or overvalued.
For UNI, history shows that the altcoin becomes overvalued when the MVRV ratio is between 21.02% and 45.72%, as shown below. Since the metric is much lower, Uniswap’s price will likely keep increasing in the short term.
UNI Price Analysis: No Bearish Pressure
On the technical side, the 4-hour chart shows that the green line of the Supertrend is below UNI’s price. This happened as the altcoin surged above the upper trendline of the descending triangle.
This breakout and the super trend position indicate that Uniswap’s price has strong support at nearly $5.70. In addition, the Directional Movement Index (DMI) also supports the bullish case for Uniswap.
As of this writing, the +DMI (green) currently sits at 30.55, well above the -DMI (red) at 13.57, indicating a strong uptrend.
With this strength, Uniswap’s price looks ready to break above the $6.93 resistance. If that happens, the price could rally toward $7.61 and potentially make a run at $10.
However, if bullish momentum weakens, that outlook could change. A reversal might drag UNI down to around $5.36 in that scenario.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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