UMA price prediction: Will UMA bounce back?
The crypto fear and greed index pointed to ‘greed’ at the time of writing (28 March), hitting 60, up from 21 on 13 March that signalled extreme ‘fear’. According to CoinMarketCap, the bulk of cryptocurrencies, including bitcoin (BTC) and ethereum (ETH), have posted decent gains over the previous week – BTC gained 14.16%, reaching $47,031; ETH rose 15.48% to $3,327.
Decentralised finance (DeFi) platform UMA (UMA) gained 4.8% over the past seven days, hitting $8. It’s down more than 81% from the all-time high price of $43.37, achieved on 4 February 2021. It plummeted to a 52-week low of $4.36 on 24 February amid the bearish outlook in the broader cryptocurrency market.
Can the UMA token price recover the momentum and test new highs this year? Let’s conduct a UMA coin price analysis, and look at a round-up of recent news and developments. This should help you form a plausible UMA price prediction.
What is the UMA coin?
UMA, an abbreviation for universal market access, is an Ethereum-based DeFi protocol that enables users to construct customised and collateralised synthetic assets following the price of any asset. UMA enables users to trade any asset using ERC-20 tokens without really owning the asset.
A financial derivative is a contract between two parties based on the performance of another asset. Rather than trading the underlying asset, agreements are created to exchange cash or other assets for the underlying asset within a certain timeframe. The underlying asset's value varies, as does the derivative agreement's net present value (NPV).
Financial derivatives allow market players to gain access and hedge risks of trading assets that could be difficult to purchase or sell otherwise.
UMA utilises the blockchain to store derivatives. When collateral is placed, it generates a synthetic token for the asset, defines the contract conditions for the generated token and enforces them via financial incentives.
Additionally, UMA Protocol seeks to provide smart contracts and decentralised autonomous organisations (DAOs) with equal access to all types of financial risks, enabling new effective applications for DeFi products.
The UMA token is the platform's native currency. Holders of these tokens can vote on UMA improvement proposals (UMIPs) and use them for staking.
UMA news and price drivers
UMA has undergone a number of important milestones and developments lately, which may drive the UMA token price.
Integration of UMA’s optimistic oracle by Polymarkets
Polymarkets integrated UMA's optimistic oracle in February 2022 to provide automatic and decentralised resolution for the information markets shown on the Polymarkets interface. Polymarket is a decentralised prediction market that enables users to speculate on the outcome of upcoming events.
An optimistic oracle enables a trustless and secure procedure for markets to be "resolved", which means the owed amounts can be redeemed by those who made the correct prediction.
Launch of Hats Finance vault with protected tokens
UMA partnered with Hats Finance in January 2022 to give incentives to whitehat hackers who disclose vulnerabilities in UMA's smart contracts. Hats Finance is a decentralised cybersecurity system that enables anybody to monetise Web3 bug bounties and reward white hat hackers.
As a consequence of this agreement, UMA financed the Hats vault with protected tokens backed by UMA. Protected token pairs are a novel concept supported by UMA's optimistic oracle that can be used to safeguard tokens from smart contract risk and user mistakes. In addition, these protected tokens safeguard the underlying UMA assets from theft or loss in the event of a vault failure.
Raise of .6m with the pilot of the Range Token
In July 2021, Risk Labs, the organisation that sponsors UMA, issued the first Range Token backed by UMA collateral to raise approximately $2.6m from a select group of DeFi enthusiasts, including Amber Group, BitDAO, Blockchain Capital, Robert Leshner and Wintermute Trading.
The range token enables DAOs to diversify their holdings without selling their original tokens. Rather than that, DAOs borrow capital using their token as collateral, eliminating the danger of liquidation and then sell the tokens later to profit from a higher price. UMA's objective is to transform Range Token into a primitive that can be borrowed against and utilised to diversify the treasury of several DAOs.
Partnership with Crypto.com and Yam Finance
In May 2021, UMA partnered with Crypto.com (CRO) and Yam Finance to collaborate on a suite of non-fungible tokens (NFT) products.
Working with UMA and YAM on this endeavour enables Crypto.com to provide the necessary infrastructure to their clients and iterate on the indices and products accessible via the Crypto.com suite of offerings.
For UMA and YAM, collaborating with Crypto.com entails developing NFT products with a forward-thinking team and expanding their user base.
UMA/USD price analysis
According to ICO Drops, UMA’s initial coin offering (ICO) concluded in April 2020 at $0.26 a token. Since then, it has returned an ROI of 448.74%, according to CoinMarketCap.
Based on the earliest available price data from 2020, UMA token price spiked from $1.20 on 26 May to $24.99 on 9 September – a rise of 1,982%. However, it declined to $5.92 on 7 October and closed the year at $11.05.
During the onset of 2021, the broader crypto market was bullish. According to the historical price chart, UMA token thrived on the positive market sentiment and reached its all-time high of $43.37 on 4 February.
However, it dropped to $11.76 on 23 May, a massive decline of 73% from all-time high prices. The general crypto market turned bearish in May 2021 when Elon Musk tweeted about discontinuing bitcoin payments for Tesla cars. Around that time, the Chinese government heightened its cryptocurrency crackdown. The downtrend continued. The UMA token price declined to $7.57 on 20 July.
The broader crypto market recovered after making July’s low. UMA reached $20.52 on 15 November. However, the rally didn’t sustain. Retracement brought the price to $9.17 on 31 December.
UMA token didn’t find a favourable start to 2022. Its price tanked, making a 52-week low of $4.36 on 24 February. However, a strong bull rally pushed the price to its 90-day high of $12.48 on 1 March, an increase of 187% in less than a week.
At the time of writing (28 March), UMA was trading at $8 and had a market capitalisation of $528m.
UMA future outlook: Can it outpace the competition?
According to DeFi LIama, UMA’s total value locked (TVL) reached $51.02m at the time of writing (28 March), ranking it 94th among the top 100 Ethereum tokens by TVL. At the same time, market leader Curve Dao Token’s (CRV) TVL stood at $20.51bn.
According to CoinMarketCap, CRV’s market capitalisation is $1.25bn. The TVL gap differed by more than 400 times, indicating UMA’s lack of market strength compared to its major competitors.
Additionally, Statista estimated that the overall synthetic asset market is worth around $1.02bn, as of 24 February 2022, a fraction of the value of other DeFi markets such as decentralised exchanges (DEXs), lending protocols and yield protocols, which are together valued at approximately $125bn.
Short-term UMA forecast 2022
Meanwhile, based on technical analysis, the short-term UMA crypto price prediction from CoinCodex was neutral (as of 28 March), with 18 indicators giving bullish signals and eight bearish.
The majority of daily simple moving averages (SMA) and exponential moving averages (EMA), along with the volume-weighted moving average (VWMA) and average directional index (ADX), were giving ’buy’ signals. On the other hand, the Hull moving averages (HMA) and momentum oscillator gave ‘sell’ signals.
Meanwhile, the Williams percent Range, stochastic RSI, relative strength index (RSI) and the moving averages convergence divergence (MACD) stayed neutral.
However, based on the short-term UMA coin price prediction, the price could decline by 47.23% to reach $4.29 by 2 April 2022.
UMA price prediction: Targets for 2023, 2025 and 2030
Several algorithm-based forecasting services gave mixed longer-term UMA predictions, as of 28 March:
Wallet Investor’s UMA crypto price prediction was bearish and considered the coin a “bad” long-term investment. The average price of UMA could be $0.865 by the end of 2022, $0.719 by the end of 2023, and $0.277 by the end of 2025. Its five-year UMA/USD target price suggested the token could plunge to $0.136 by March 2027.
Meanwhile, Digital Coin’s moderately bullish UMA token forecast estimated that the UMA cryptocurrency could hit an average of $10.65 in 2022, $11.94 in 2023, $11.99 in 2024, $15.66 in 2025, $14.23 in 2026, $19.18 in 2027, $25.82 in 2028 and $32.76 in 2029. Its UMA prediction expected the coin to hit $37.15 in 2030 and $42.80 in 2031.
Price Prediction supported the bullish long-term UMA price prediction. Its projection was that the average price of UMA could hit $10.31 in 2022, $15.13 in 2023, $20.74 in 2024, $29.27 in 2025, $42.94 in 2026, $64.23 in 2027, $95.15 in 2028, $135.59 in 2029 and $204.80 in 2030. It expected the coin to exceed $250 and reach $294.72 in 2031.
When looking at UMA projections, consider that analysts’ and algorithm-based expectations can be wrong. Their UMA coin price predictions are based on fundamental and technical studies of a cryptocurrency’s past performance. Past performance is no guarantee of future results.
Note that it is essential to do your research and always remember your decision to trade UMA or any other coin depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. You should never trade with more money that you cannot afford to lose.
FAQs
How many UMA coins are there?
UMA token had a total supply of 106 million tokens and a circulating supply of 65 million tokens, according to CoinMarketCap as of 28 March 2022.
Is UMA a good investment?
UMA stands for Universal Market Access. It enables users to construct customised and collateralised synthetic assets. Since making an all-time high in February 2021, its price action has been bearish. Cryptocurrencies are very volatile assets. Whether UMA has potential to be in your investment portfolio depends on your circumstances and risk tolerance. Before you invest in UMA you should estimate the level of risk you are ready to take before investing. And never invest money that you cannot afford to lose.
How high can the UMA coin go?
According to the UMA/USD of Price Prediction (as of 28 March 2022), it could exceed $64.23 by 2027. However, Wallet Investor estimated that the UMA token price could decline to $0.136 by 2027.
Will the UMA coin reach $100?
In their UMA coin price prediction, algorithmic forecasting tools Digital Coin and Price Prediction (as of 28 March) suggested the coin had the potential for gains. Price Prediction estimated that the UMA token could exceed $100 by 2029.
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