Why Is UMA Price Down 14% Despite Oval’s Launch Capturing Lending Protocols’ Value

The price of UMA, a Web3-centered crypto project went ballistic on Wednesday as the community welcomed the launch of Oval, a new protocol dedicated to helping decentralized lending protocol’s value. In the last week, UMA price increased by a staggering 71% to $7. However, pressure from investors taking profits and other negative forces in the crypto market have resulted in UMA falling below $5.
UMA holds at $4.72 during US business hours on Thursday, down 14% in 24 hours. A higher support is needed to rescue the bulls, otherwise, the token is at risk of giving back its weekly gains.
UMA Debuts Oval For Lending Protocols
Oval is a new protocol that the team described as the first of its kind. It is designed to protect the value often lost by lending protocols through maximum extractable value (MEV).
UMA argued that “currently this value is lost to actors who contribute nothing to these protocols.”
Oval is designed to capture the massive amounts of MEV created by lending protocols.
Currently this value is lost to actors who contribute nothing to these protocols.
We believe that if a protocol creates value, they should be the ones to keep it. 🥚 🧵 pic.twitter.com/159PfJIqmw
— UMA 🥚 (@UMAprotocol) January 25, 2024
By integrating Oval using Chainlink’s Data Feeds, lending protocols will be paid every time a new price emerges that creates Oracle extractable value (OEV).
Uma believes that the “potential for total Oval revenue on just Ethereum mainnet is huge” and that lending protocols in the ecosystem should consider its integration.
Lending protocols using @chainlink Data Feeds can integrate Oval with no code changes.
Once integrated, Oval wraps the Data Feed and pays the protocol each time a new price arrives that creates OEV.
— UMA 🥚 (@UMAprotocol) January 25, 2024
Can Bulls Prevent UMA Price From Falling Further?
The 50 Exponential Moving Average (EMA) (red) holds the barrier between UMA price and more losses. This support at $4.64 could allow bulls to get a grip on the token and push for higher consolidation and a subsequent rebound.
However, with the Relative Strength Index (RSI) neutral but below 50, it would be wise for traders to prepare for more losses. A negative divergence from the price of the token implies that sellers have the upper hand.
If the price breaks and holds below the 50 EMA then shorting UMA could turn profitable over the coming sessions.
On the other hand, those interested in new long positions should be patient enough to allow the crypto to end the downtrend by confirming support at $4.64. Increasing selling pressure might push UMA to seek support at the 200 EMA (purple) around $3.
Related Articles
- Top 3 Altcoins To Buy Today January 25: ETH, OP, TIA
- 3 Top Crypto To Buy Today January 25: XRP, ADA, BONK?
- Manta Price Prediction 2024: Is The $MANTA Blastoff Rally To $5 Imminent?
- Peter Brandt Lists XRP Among Shorts Amid Crypto Market Crash
- Fed’s John Williams Backs More Rate Cuts This Year Amid Labor Market Concerns
- Bitcoin Edges Higher as Fed Chair Jerome Powell Fails to Comment on Monetary Policy
- Flare Network Surpasses $43M in Bridged XRP, Expert Predicts Breakout to New ATH
- Bitcoin, Ethereum Drag Broader Crypto Market Lower Ahead of FED Powell Speech
- Pi Network Price Collapses as Analyst Proposes Turnaround Tweaks
- Solana Price Prediction as SOL DAT Company Plans 5% Supply Acquisition—Analyst Targets $1,300 Breakout
- Bitcoin Price Prediction as US Govt. Shutdown Extends- What’s Next for BTC?
- Solana Price Megaphone Points to a Parabolic Move as SOL Treasuries Near $3B
- XRP Price Prediction Amid ETF Approval Roadblock as Analyst Warns of $2.72 Dip
- Binance Coin Price Prediction If It Surpasses Bitcoin Marketcap— Is $3000 Possible in 2025?