Uniswap's UNI Token Rebounds 67% But Faces 40% Downside Risk

Uniswap’s token price has experienced a rebound over the past three months, but technical indicators suggest a potential pullback. The token, UNI, reached $7.5485 on July 8, marking a 67% increase from its lowest point in April. This surge valued UNI at approximately $4.7 billion. However, on-chain data reveals that the supply of UNI on exchanges has climbed to 85.6 million, the highest level since June 5. This increase from 82.1 million last month and a year-to-date low of 69.27 million signals that holders may be preparing to sell, thereby increasing the downside risk.

On the positive side, Unichain, the layer-2 network launched in March, continues to gain traction. Its protocols handled over $366 million in transactions in the past 24 hours, contributing to a 30-day volume of $6.23 billion. This makes Unichain the third-largest layer-2 DEX network. The DeFi total value locked in Unichain has continued gaining momentum, rising by over 28% in the last 30 days to over $1.17 billion. This makes it significantly larger than Cardano, a popular blockchain with less than $350 million in assets. Unichain’s total transactions have continued rising in the past few months, with a 42% increase in June, making it one of the fastest-growing chains in the crypto industry.

Another bullish signal is the surge in whale holdings of UNI, which have increased by 58% over the past 30 days to 5.69 million. Public figure investors increased their holdings by 1,162% to 176,748 UNI, while the top 100 addresses grew their balances by 16% to 812 million UNI. Despite these positive indicators, the daily chart shows that UNI has dropped from its 2023 high of $19.44 to the current $7.53. It remains below the 23.6% Fibonacci retracement level of $8.10. The MACD indicator is signaling a bearish divergence, and the price has formed a rising wedge, a bearish chart pattern with ascending, converging trendlines. As the pattern nears confluence, a downside breakout is becoming more likely. If this happens, the next level to watch will be at $4.60, its lowest level this year, which is about 40% below the current level.

The price of Uniswap's native token, UNI, has been on a downward trajectory, falling from its 2023 high of $19.44 to its current price of $7.53. This decline has placed UNI below the 23.6% Fibonacci retracement level of $8.10, indicating a potential risk for further price decreases. The daily chart shows a rare pattern forming amidst significant whale buying activity, which could either stabilize or exacerbate the price volatility. Whale activity, characterized by large transactions from wallets to exchanges, has been a notable factor in the market. The Crypto Fear and Greed Index, which is at a level of 64, indicates a state of greed. This sentiment is influenced by various factors including price volatility, volume, impulse, and technical analysis. The index suggests that while there is a bullish sentiment, the market remains cautious due to the recent price drops and the formation of the rare pattern on the UNI chart.

The technical analysis indicators, which include popular market indicators, show a mixed sentiment. The technical analysis indicator for Ethereum, which is often used as a proxy for UNI due to their interrelated markets, analyzes 26 popular stock market indicators. These indicators are subdivided into trend indicators and oscillators, and their average reflects the impact on market analysts. The technical analysis suggests that while there is some bullish sentiment, the overall market sentiment is cautious. The social media sentiment analysis, another key factor determining crypto market sentiment, shows that Ethereum's popularity on major platforms remains high. This is reflected in the social sentiment index, which is based on the voting system of one of the largest platforms in the crypto world. The dominance of Ethereum in the general market also plays a role in the sentiment, as increased altcoin investments can decrease Ethereum's dominance, which in turn affects UNI.

The order book analysis for Ethereum on a popular exchange shows stronger buying pressure than selling pressure close to the price, indicating a bearish sentiment. This is because there are more buy orders within equal distance to the price, suggesting that the market is expecting a price decrease. However, stronger selling pressure above the price indicates a bullish sentiment, as there are more sell orders to execute than buys at the same distance. In summary, the price of UNI is at risk due to the formation of a rare pattern on the daily chart and the significant whale buying activity. The Crypto Fear and Greed Index indicates a state of greed, but the technical analysis and order book analysis suggest a cautious market sentiment. The social media sentiment analysis and the dominance of Ethereum in the general market also play a role in the overall sentiment. Investors should closely monitor these factors as they could significantly impact the price of UNI in the near future.