фото показано с : newsbtc.com

UMA bulls have taken a break from pumping the token, given the magnitude of its price correction in the last 36 hours.

The UMA/USDT exchange rate fell by circa 25 percent within the said period. As of September 1, the pair was trading at a year-to-date top of $30 following a 700 percent rally. The record high prompted traders to exit their long positions at extensive profits, causing the price to plunge lower.

The plunge pushed UMA/USDT below the 20-period moving average wave (green), a support level that was maintaining the pair’s short-term bullish bias. At the same time, UMA/USDT closed below the 38.2% Fibonacci retracement support of $20.11. That raising its possibilities of further downside moves towards $17.04.

Meanwhile, the popularity of UMA’s parent company of the same name kept its medium-term bullish sentiment high. In retrospect, UMA–the blockchain protocol–provides users with a so-called Universal Market Access. People can utilize the protocol for creating self-enforcible, universally-accessible financial contracts.

“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,” read their official paper. “But unlike traditional derivatives, UMA contracts are secured with economic incentives alone, making them self-enforcing.”

UMA released 2 percent of its native tokens on decentralized exchange Uniswap. The project offered the DeFi cryptocurrency at the same price it sold them to seed investors. However, since there were no UMA tokens in the market, the price had no way but to go north from there.

Meanwhile, the UMA protocol released a synthetic coin representing ETH/BTC – a pair that measures Ethereum’s rate against Bitcoin – through collateralization of stablecoin DAI. As of late, the project also issued a synthetic token for the newly-launched DeFi coin Sushi.

So, $UMA just became the most valuable DeFi token.

I don't think it having the highest APY pool for $SUSHI is the sole reason, rather a contributing factor.

The fact that that helped flip YFI, LEND, SNX, etc gives you an idea of how powerful incentivisation can be right now. pic.twitter.com/I9XYu16BZT

— Hsaka (@HsakaTrades) August 31, 2020

UMA, as a token, represented users’ stakes in those pools, making it yet another yield farming token before traders looking to capitalize on the DeFi boom.

UMA token was technically overbought before the 35 percent crash. It now stands neutralized, awaiting further clues from traders for its next-best direction.

So far, UMA/USDT has formed successive lower lows on a 4H chart. That means a short-term downtrend. If any of the support levels mentioned in the first section of this article hold strong, then traders may use it to accumulate the token, given its strong fundamentals.

Should that happen, the token expects to test $23.92 next as its resistance level. Meanwhile, a break above it could have traders open long entries towards $30, the pair’s all-time high.

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