Uniswap (UNI), a leading Decentralized Exchange (DEX), has seen significant gains this year. However, recent on-chain activity suggests a potential shift in investor sentiment.
Whales Take Profits, Large Address Holdings Decline
Data from Lookonchain reveals a major whale depositing over $4 million worth of UNI on Binance. Notably, this marks the whale’s first UNI sale in over a year, suggesting a potential profit-taking move. While the whale still holds a substantial UNI amount, Onchian analysis indicates a decline in the percentage of large addresses holding UNI, hinting at a broader trend of waning whale interest.
Technical Indicators Point to Bearish Trend
The emergence of a “triple bottom” pattern on UNI’s price chart from May 26th to June 17th followed by a price drop signifies a bearish trend. Recovering from this downtrend might require UNI to retest the $9.310 level multiple times. Additionally, declining Relative Strength Index (RSI) and Chaikin Money Flow (CMF) values point towards weakening bullish momentum and lower capital inflow.
Uniswap’s network growth has also dipped, indicating a decrease in new user interest in UNI. Furthermore, the altcoin’s velocity, a measure of how frequently a token is being used, has depreciated significantly, suggesting a potential slowdown in trading activity.
Also Read: Uniswap V2 Takes DeFi To New Heights: Why Ethereum Layer 2 Is Soaring
Uniswap v4 Update: A Potential Bright Spot
Despite the recent concerns, the upcoming Uniswap v4 update with its innovative “hooks” concept offers a ray of hope. These hooks, acting as mini-code snippets, can be triggered at various points within a liquidity pool’s life cycle, potentially leading to increased functionality and user engagement.
The Verdict: Uncertain Future for UNI
While Uniswap v4 holds promise, the combination of whale selling, declining on-chain activity, and technical indicators all point towards a potential short-term price correction for UNI. Whether the upcoming update can reignite investor interest and propel UNI back on a bullish trajectory remains to be seen.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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