Uniswap v3 Liquidity Distribution and Buy & Sell Pressure
Buy & Sell pressure can be used to predict the next movement of the price. Because price always move along the direction which has least resistance.
Loading...
Loading...
Loading...
Latest Swap Info and Liquidity Distribution
This dashboard does two jobs:
- Display the Liquidity Distribution, like the plot in Uniswap v3 app. However, my plot is more intuitive. for example
- my plot show x-label in percentage change against latest swap price
- my plot sort ticks in ascending order)
- Display the Buy & Sell pressure at current price (i.e., latest swap). Since price will always flow along the direction which has least resistance.
- if Sell pressure is less then Buy pressure, price is likely to fall.
- if Buy pressure is less than Sell pressure, price is likely to rise.
Parameter Explanation
- pool address: address of a Uniswap v3 pool, on Ethereum blockchain
- price_delta_ratio: maximum change percentage around current price. for example, if price_delta_ratio=0.5, then 'Liquidity Distribution' plot will only display the distribution from 0.5*current_price to 1.5*current_price
Buy and Sell Pressure
Below two charts are equivalent, the only difference is plotting the buy/sell pressure on the same side or on different sides.
- x-axis represents percentage change against current price (latest swap price).
- y-axis represents buy (green, positive) or sell (red, negative) pressure.
For example,
- if x=0.02, and y=6M, that means, if I want to raise token0's price 2% higher, I need to buy 6 million worth of token0. Or I can say the buy pressure is 6M.
- if x=-0.02, and y=-6M, that means, if I want to push down token0's price by 2%, I need to sell 6 million worth of token0. Or I can say the sell pressure is 6M.
I define the indicator 'long strength' (blue line in right chart) as: Sell Pressure / Buy Pressure - 1
. Price is always oscillating, with the same oscillation scale (for example, 2%),
- if sell pressure is larger than buy pressure, price is likely to move up, indicator 'long strength' > 0
- if buy pressure is larger than sell pressure, price is likely to move down, indicator 'long strength' < 0