Uniswap Price Prediction: UNI targets $16 as technicals and on-chain metrics turn bearish
|- Uniswap price is primed for a steep correction after breaking down from an ascending triangle pattern.
- Several technical and on-chain indicators add credence to the bearish outlook.
- If UNI slices through the $17.50 support, it could quickly drop towards $16.
Uniswap's 350% year-to-date rally could be coming to an end as its price has declined by more than 15% from an all-time high of $22.70. The DeFi token seems bound for further losses since investors continue to book profits.
Uniswap price reverses as bears take over
Uniswap price broke down from an ascending triangle pattern on February 6. The technical formation forecasts a 20% downswing that could push UNI's market value towards $16. This target is determined by measuring the height of the triangle's y-axis and adding it to the breakout point.
The pessimistic thesis is further validated by the Parabolic SAR and the SuperTrend indicator. While the former had a bearish flip over as prices broke down on February 6, the latter flashed a sell signal after Uniswap price fell below $18 on February 7 on the 4-hour chart.
UNI/USDT 4-hour chart
If the downward pressure continues, UNI might soon meet the triangle's target at $16.
On-chain metrics scream sell
Several on-chain metrics also paint a grim picture ahead for Uniswap price.
For instance, on-chain volume hit a peak of $6.6 billion on January 28, and since then, it has dropped to $952 million as of February 8. The 86% decline within such a short period suggests an exit of capital from investors reallocating or booking profits.
Moreover, the number of new daily addresses joining Uniswap's network plummeted by 40%, going from 10,959 addresses on January 31 to 6,475 on February 8.
This on-chain metric's significant decline signifies that market participants are not attracted to the DeFi token around the current price levels. Such lack of interest in Uniswap is also represented in its social volume, which recorded a 98% decline within the same period.
On-chain data analytics firm Santiment maintains that when these three indexes drop in unison, they form a reliable sign for future downward price action.
UNI On-Chain Volume, Daily Active Addresses, and Social Volume
Despite the number of sell signals that Uniswap price presents, it seems to be sitting on top of stable support, based on IntoTheBlock's In/Out of the Money Around Price (IOMAP) model.
Roughly 160 addresses previously purchased about 12.5 million UNI at $17.50. Therefore, only a 4-hour candlestick close below this demand wall will validate the bearish thesis and lead to further losses.
Uniswap IOMAP
On the flip side, Uniswap price faces stiff resistance at $20. Here, 5,000 addresses have previously purchased roughly 10 million UNI.
Given the unpredictability of the cryptocurrency market, it is reasonable to assume that a 4-hour candlestick close above $20 may have the momentum to invalidate the bearish scenario. If this were to happen, FOMO might kick in among investors pushing Uniswap price to $25.
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