Uniswap’s UNI token has taken a hit over the past few days. Although it isn’t the only cryptocurrency currently plunging lower as the market continues being plagued by uncertainty, it has been hit particularly hard.
The recent news regarding the CFTC’s decision to pursue criminal charges against the BitMEX creators has contributed to the entire market’s recent weakness and may be sparking some concerns amongst investors in governance tokens over decentralized trading platforms.
One trader explained in a recent tweet that it is “naïve” to believe that regulators won’t eventually come after decentralized trading platforms like Uniswap.
As such, some investors may be taking some money off the table in anticipation of a regulatory crackdown against “decentralized” products and platforms, which could be adding some sell-side pressure to UNI’s order books.
If regulators take any further actions against crypto exchanges – and especially decentralized ones – Uniswap’s token could be hit hard.
Uniswap’s UNI Dives Below $4.00 as Crypto Market Weakens
At the time of writing, Uniswap’s token is trading down 8% at its current price of $3.90. This is around the price at which it has been trading at throughout the past several days and weeks.
Buyers have been unable to gain control of its mid-term trend ever since it peaked at highs of $8.50.
Each rebound in the time following the descent from these highs has been short-lived and followed by it seeing further downside.
It is still trading slightly above its recent lows of $3.50, and bulls posted an ardent defense of the $3.60 level earlier today.
That being said, there’s still a chance that further downside is imminent unless Bitcoin, Ethereum, and the rest of the crypto market continue moving lower.
Top Trader Warns of Regulators Coming After Decentralized Platforms
While speaking about the recent charges brought about to the BitMEX owners from the CFTC, one trader explained that he believes this could be the start of a greater trend that particularly impacts decentralized platforms.
He notes that this is bearish for DeFi protocols, including Uniswap (UNI).
“I hate to be a doomer, but this is incredibly bearish for any DeFi type protocol. If you don’t think the US is looking at exchanges or dAPPs that are unregulated doing hundreds of millions of volume per day… you’re being very naive.”
It may be quite some time before there are any further developments surrounding this potential crackdown, which means that this fear may only have short-term implications for Uniswap’s UNI.
Featured image from Unsplash. Pricing data from TradingView.