ETH Price vs TVL

Comparing ETH price and Uniswap's TVL shows that the TVL closely resembles the price of ETH. Seeing that ETH is the market mover of ETH based tokens, it's not really a surprise. The quarterly graphs show that Uniswap's TVL had doubled during DeFi summer in Q1 and Q2. This growth, however, did not continue during Q3. With ETH prices stagnating between 2k and 3k, Uniswap's TVL stopped growing altogether. So, based on this metric, Uniswap's TVL can be predicted using ETH's price movement. Let's say we predict that ETH will achieve $10k by year end, then ETH will have to increase by 200% before year end, this also means that Uniswap's TVL will likely increase by roughly 200% in the same time period as well.

Volume

Another metric that we can consider is by basing it off of Uniswap's total volume. In theory, if the total volume goes up, the APR of the pools go up, which in turn helps to draw the attention of the users who might want a piece of the pie. Therefore, the increase in volume should increase the TVL as more users provide liquidity to earn some passive interest. Based on this, Q1-Q3's graphs were plotted. Although the graphs don't show much correlation between the two, we can see that the volumes are typically higher when the TVL is high. So what affects the volume? In my opinion, the current biggest factor affecting Uniswap's volume is the gas fee on ETH, where large gas fees are driving users away from the ETH network to far cheaper chains such as Terra. As we know, the gas fee had not decreased for a while now and is expected to increase further as the price of ETH goes up. With this in mind, Uniswap's TVL may stay stagnant throughout Q4 as the gas fee rises since no one will be willing to trade, thus decreasing the volume of the pools, which further indicates that less users will be providing liquidity to the pools.