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.”
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.
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.
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