Uniswap Price Prediction: UNI on-chain metrics spell trouble following a 300% bull rally


  • Uniswap price may be due for a correction as multiple technical indicators flash sell-signals.
  • Several fundamentals also predict that a local top might be in for the DeFi token.
  • A breakdown of the critical demand area at $17 could signal the start of a pullback.

The parabolic surge in Uniswap price could be coming to an end as a confluence of technical and fundamental indicators suggest a pullback on the cards. An increasing price coupled with decreasing volume and rising retail chatter hint that Fear Of Missing Out [FOMO] is at its peak, which usually leads to a price drop.

Uniswap price faces immense bearish pressure after a 300% rally in 20 days

The UNI token saw a 300% surge in its price in less than 20 days starting from January 12, and this surge can be attributed to a multitude of on-chain metrics. At the time of writing, the DeFi token is failing to trade above an immediate demand barrier at $17.97 and could be due to retracement after the sell-signal flashed by the TD Indicator on the 1-day chart.

UNI/USDT 1-day chart Trading View

UNIUSDT 1-day chart

In addition to the TD Sequential indicator, the Moving Average Convergence Divergence [MACD] Indicator presented a decreasing buying momentum due to diminishing histograms.

The Fibonacci Retracement tool extending from the trough to peak between January 11 and 31 suggests that another crucial demand barrier exists at 78.6% Fibonacci level or $17.106. A breakdown of this level could signify the start of the correction phase for the UNI token.

On-chain metrics suggest discrepancies

Uniswap price surge was exponential, no doubt. However, the volume doesn’t concur, resulting in a divergence, which indicates weakness in the rally.

Uniswap price vs. volume

Price vs. volume chart

The volume surge for UNI token peaked on January 28, but the price continued to surge until January 31, suggesting that the $20 could be the local top.

An exponential surge typically invites the retail investors, and more often than not, FOMO happens at the peak.

Uniswap social volume

Uniswap Social volume

Uniswap token’s social volume hit a high on January 30 as the price closed above $18, indicating peak investor FOMO and a potential local top.

Additionally, whales that hold 1,000 UNI to 1,000,000 UNI have been taking profit or redistributing their holdings since January 24. This process picked up on January 31, adding credence to the local top hypothesis.

Uniswap whale holder distribution

Whale holder distribution

Perhaps, the most significant on-chain metric that matters is the increase in UNI supply held on exchanges. This increase in exchange supply/deposits is a tell-tale sign that users are ready to take profits.

Uniswap coin supply on exchanges

Coin supply on exchanges

UNI tokens on exchanges increased by 3.6% at the time of writing since January 31, indicating that a correction might be inevitable for the DeFi token.

A breakdown of the critical support at $17.106 could spell disaster for the coin as the next area of support is approximately 16% lower, at $14.38. That level coincides with the 61.8% Fibonacci level, where 14.51 million UNI were previously purchased by 10,000 addresses, as suggested by IntoTheBlock’s In and Out of the Money Around Price [IOMAP].

Uniswap IOMAP chart

IOMAP chart

Although unlikely, it is worth noting that a close above $19 could alleviate the short-term bearish pressure and perhaps even invalidate it, provided there is volume backing this surge followed by a retest of the all-time high [ATH] at $20.56.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms

Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms

Bitcoin price teased its all-time high of $73,777 last week but declined to trade below $69,000 on Monday. Analysts suggest that market volatility is expected to rise as the US presidential election approaches.

More Bitcoin News
Litecoin poised for double-digit decline after breaking ascending trendline

Litecoin poised for double-digit decline after breaking ascending trendline

Litecoin breaks and closes below an ascending trendline, signaling a change in market structure. On-chain metrics paint a bearish picture, as LTC’s dormant wallets are active, and the NPL indicator shows a negative spike.

More Litecoin News
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all faced resistance at crucial levels ahead of the US Elections, leading to a price decline. As of Monday, they neared key support levels, and a firm close below these marks could signal further declines.

More Cryptocurrencies News
21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC

21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC

21Shares filed an S-1 registration with the Securities and Exchange Commission (SEC) on Friday for an XRP exchange-traded fund (ETF). While the chance of approval is slim with the current SEC administration, the landscape could change after the upcoming elections.

More Cryptocurrencies News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP