Uniswap (UNI) Rises 3.5% Amid Whale Buy & Market Caution

In A Nutshell

Uniswap (UNI) has recently witnessed a noteworthy surge in its price, climbing over 3.5% in the last 24 hours. This upward movement comes after a period of decline, wherein UNI saw a drop of over 7% in the preceding week. A significant purchase by a whale, as reported by Lookonchain, has sparked interest, potentially signaling a bullish momentum for UNI. However, certain indicators and market dynamics hint at potential hurdles ahead for UNI’s continued price rally.

Uniswap’s Recovery Trajectory

The last week marked a challenging period for Uniswap, diverging from the broader crypto market’s bullish trends. Data from CoinMarketCap indicated a downturn for UNI, with a reduction in its price. Nonetheless, a notable transaction by a whale, involving the withdrawal of 86,467 UNI from Binance worth $1.23 million, seemed to catalyze a reversal in UNI’s fortunes. Following this transaction, UNI’s price experienced a significant bounce. At the moment of writing, UNI stands at $14.32, boasting a market capitalization surpassing $8.5 billion. Analysis from Glassnode suggests the possibility of a sustained upward trend, as indicated by Uniswap’s Network Value to Transactions (NVT) ratio, which hints at the asset being undervalued.

Challenges on the Horizon

Even with the buying momentum, there are challenges looming. Santiment’s data shows a decrease in UNI’s supply on exchanges and an increase in supply outside of exchanges, indicating strong buying pressure. However, a closer look reveals that whales have been offloading their UNI holdings, leading to a decline in the supply held by top addresses. This scenario is compounded by Hyblock Capital’s data, which forecasts a significant liquidation point at the $14.6 mark. Such a liquidation event could increase selling pressure, potentially curtailing the ongoing bull rally. Additionally, Uniswap’s price movement into a less volatile zone and a bearish crossover on the MACD further suggest that the current bullish phase may be short-lived, despite a bullish signal from the Money Flow Index (MFI).

Our Take

Uniswap’s recent price surge, driven by whale activity, has reignited interest in its market trajectory. While the short-term outlook appears bullish, several indicators and market dynamics suggest caution. The impending liquidation point and the potential increase in selling pressure pose significant challenges to the sustainability of the current price rally. Investors and traders should remain vigilant, considering both the bullish signals and the potential risks highlighted by the market data. Ultimately, UNI’s capacity to sustain its upward momentum will depend on a delicate balance between buying pressure and the looming threats of increased liquidations and whale movements.