- UMA token soared to a multi-month high of $3.17 on Friday.
- It was one of the best-performing cryptocurrency in the industry.
- Shorts liquidations have jumped to the highest point in months.
UMA price jumped sharply this week as the developers made some notable announcements. The token soared to a high of $3.17, the highest point since August 23. At its peak, the token was up by more than 117% from the lowest point this week.
What is UMA soaring?
Universal Market Access (UMA) is a relatively unknown blockchain project that provides oracle products to the blockchain industry. An oracle is a platform that connects off-chain data such as market prices to the on-chain. Some of the best-known oracles in the industry are Band Protocol and Chainlink.
UMA uses a different model in its oracle products. For one, it provides optimistic oracles by emphasizing on validating data and serving it on-chain to resolve markets. As a result, this model makes it possible to validate any data.
It is unclear why UMA price jumped on Friday. A likely reason is that the token’s volume has jumped sharply in the past few days, which is a signal that there could be some upcoming news. Data compiled by CoinMarketCap shows that the volume has jumped by 1,230% in the past 24 hours to $260 million in the past 24 hours.
Most of these tokens are being traded in Binance, which accounts for over 85% of all the UMA traded. Other popular exchanges are Bithumb and Coinbase.
Another possible reason is that shorts liquidations have jumped sharply in the past few days. Data by CoinGlass showed that shorts liquidations jumped to over $410k compared to bulls liquidations of $7.78k. That was a big number considering that shorts and longs liquidations on Thursday were $3.6k and $154k, respectively.
Liquidations are important parts of the crypto industry. They happen when exchanges forcefully close leveraged orders in a bid to prevent further losses.
UMA price prediction
On the daily chart, we see that the UMA crypto price was in a consolidation phase in the past few days. This changed on Friday when it jumped sharply. It rose to a high of $3.18. The token has more than doubled this year and moved above the 50-day moving average.
Therefore, I suspect that the token will pull back during the weekend and retest the key support at $2.42, which is about 12% below the current level. A move above this week’s high of $3.18 will validate the bullish view.
