Uniswap Price Analysis: UNI jumps 18% after OKEx suspends withdrawals


  • OKEx lost contact with one of the private keys holders leading to the suspension of withdrawals.
  • UniSwap rallies amid debate on how DEXs offer better services than centralized exchanges.

The cryptocurrency industry has been treated to an unusual occurrence on Friday after OKEx, a leading exchange, suspended withdrawals. The event shook the entire market, led by Bitcoin's drop from $11,500 to $11,200.

Major altcoins such as Ethereum, Ripple and Bitcoin Cash plunged only to find support at $365, $0.24 and $250 in that order. The market is yet to recover from the shock, while many analysts believe that more declines are in the offing.

On the contrary, UniSwap (UNI), the native token of the decentralized exchange, UniSwap experienced an unexpected price jump following the OKEx withdrawal suspension news. Meanwhile, UNI is doddering at $3.23, following an incredible spike from levels slightly above $2.8.

OKEx in the spotlight after suspending withdrawals

Towards the end of the Asian session on Friday, OKEx announced the suspension "of digital assets/cryptocurrencies." One of the holders of the exchange's private keys "is currently cooperating with a public bureau," in a continuing investigation. OKEx claims that they have not been in contact with the private key holder; hence, "the associated authorization could not be completed."

The exchange assured customers that apart from the withdrawal of digital assets/cryptocurrencies, all other operations remain functional. The withdrawals will commence "immediately once the concerned private key holder is able to authorize the transaction."

Why decentralized exchanges could be the solution

Decentralized exchanges, commonly known as DEXs, allow selling and buying of digital assets but never take custody of the funds. In other words, funds are transferred from one user wallet to another. Smart contracts are utilized in the execution of trades. In other words, the user is always in control of their funds. On the contrary, centralized exchanges such as OKEx take custody of the funds, just like a typical bank will do.

Whereas the centralized exchanges ensure the safety of their customers' funds, DEXs have no control over this. In addition to providing custodial services, centralized exchanges must ensure that withdrawals are made timely.

Decentralized exchanges like UniSwap are hardly victims of hack attacks because they do not store large volumes of funds like centralized exchanges. Hacking attacks are common in centralized exchanges. For instance, Bitstamp was hacked in 2015, Japan-based Coincheck exchange suffered a massive attack in 2018 and the defunct Mt.Gox exchange was also hacked twice in 2011 and 2014, among other cases.

As mentioned earlier, users on DEXs have full control over their funds and do not need to wait for the platforms' withdrawals. Instances of centralized exchanges freezing withdrawals are not new. Besides, the OKEx announcement on Friday told customers that "pursuant to 8.1 Service Change and Interruption of the Terms of Service, OKEx may change the Service and/or may also interrupt, suspend or terminate the service at any time with or without prior notice."

UniSwap triumphs in the mayhem

The rally witnessed in UniSwap highlights the need for a paradigm shift in how exchanges handle customer funds. Users would like to control their money as it gives them peace of mind and control. The OKEx suspension of withdrawals highlights the value of decentralized exchanges like UniSwap, as reflected by the remarkable price movement.

UniSwap boost is running out of steam

The incredible price action following the communication from OKEx hit a barrier formed by a confluence of the 100 Simple Moving Average (SMA) and 200 SMA. However, a bullish divergence of the Relative Strength Index (RSI) shows that buyers still have the upper hand. If bulls can flip the confluence into support, UNI may resume the uptrend to $3.8. Unfortunately, buying pressure is diminishing.

UNI/USD hourly chart

UNI/USD price chart

On the downside, the 50 SMA is holding as immediate support. Bulls must defend this zone to avert a potential reversal. Meanwhile, crucial support lies at $2.8 in addition to the significant anchor at $2.5.

Looking at IntoTheBlock's IOMAP model, challenging resistance levels lie ahead. The zone between $3.3 and $3.4 comes out as the most robust seller congestion area. Here, roughly 3,300 addresses previously bought around 32.5 million UNI.

On the flip side, the dwindling support shows that UNI could soon retreat to the levels before the OKEx news. The primary support lies from $3.1 to $3.2, where 156 addresses bought approximately 13.5 million UNI.

UNI IOMAP chart

UNI IOMAP chart

Looking at the other side of the fence

It is worth mentioning that if the confluence resistance at the 100 SMA and 200 SMA is overcome, UNI/USD could keep the uptrend intact. The RSI shows that buyers are relatively in control only that they lack the power to push above $3.3. Moreover, if terrible news continues coming out of OKEx, investors will continue giving DEXs attention, which will boost UNI to levels past $3.8.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP