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The cryptocurrency market remains under pressure, the price of Bitcoin is still not able to stabilize above $40000 resistance, and the risk of further declines is still not over. UMA has weakened from $32.25 below $10 since 10th May, and the current price stands around $14.6.
Fundamental analysis: It is not the best moment to invest in UMA
UMA is an open-source infrastructure that enables the creation of fast, efficient, and secure synthetic assets on the Ethereum blockchain. Developers can easily develop a new synthetic asset by using a priceless synthetic token contract template, while it is important to mention that tokens that are built on this infrastructure can track the price of anything.
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The native token of this open-source infrastructure is the UMA token, which is used as a governance token for the UMA system. Equities, futures, cryptocurrencies, insurance products, among others, can be traded on UMA, and the goal of this project is to make trading open to anyone without paying a high fee.
UMA is a truly unique DeFi project with unimaginable potential; the popularity of this project is rising across the globe, while more and more exchanges are offering this cryptocurrency. Despite this, UMA has collapsed from the recent highs registered in the second week of May, and the risk of further declines is probably not over.
Bank of China announced that digital tokens couldn’t be used as a form of payment, and this announcement created a sell-off. The crypto market has shed billions, and it is important to mention that cryptocurrency analysts Carter Worth said on CNBC that Bitcoin could drop below $30000 in the near future.
Another negative news is that the Chinese government issued a statement pledging to introduce tighter crypto regulations and warned investors against speculative crypto trading.
“Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” the Chinese government said in the statement.
Technical analysis: The risk of further declines is probably not over
The cryptocurrency market remains under pressure, the price of UMA can easily back below the $10 support, and probably it is not the best moment to invest in this cryptocurrency.
UMA currently trades around the $14 level, but it would be a strong sell signal if the price falls below $10 support. The next price target could be around $8 or even $5; still, if the price falls jumps above $20, we have the open way to $25.
UMA has collapsed from the recent highs registered in the second trading week of May, and probably it is not the best moment to invest in this cryptocurrency. If the price of Bitcoin falls below the $35000 support level, it would be a firm “sell” signal, and this would add further pressure to the whole cryptocurrency market.