Galaxy Digital has sent shockwaves through the crypto market by depositing 600,000 Uniswap (UNI) tokens, valued at approximately $4.37 million, to Binance and OKX. This move is part of a broader trend, with the firm transferring 5.26 million UNI tokens—worth $40.6 million—over the past week. Large transactions like these often raise speculation, as whales have the power to significantly influence market sentiment.
The key question traders are asking: Does this whale activity signal a bullish rally, or is it a precursor to a deeper correction for Uniswap?
UNI’s On-Chain Data: In/Out of the Money Analysis
According to IntoTheBlock data, only 19.49% of Uniswap holders are “in the money,” holding approximately 194.9 million UNI tokens at a profit. Meanwhile, a striking 74.35% of holders remain “out of the money,” suggesting that the majority are currently at a loss.
This high proportion of underwater positions could be pivotal. If UNI experiences an upward move, many holders may opt to break even, leading to increased sell pressure that could stall potential gains.
Price Action: Consolidation or Breakdown?
UNI is currently testing a critical demand zone around the $7.50 level. At press time, the token was trading at $7.52, reflecting a modest 1.4% gain over the past 24 hours. With the Relative Strength Index (RSI) hovering at 37.63, there remains potential for a rebound—provided the demand zone holds. However, a breakdown below this level could indicate further downside.
Network Growth and Activity Decline: A Red Flag?
Recent on-chain data suggests waning investor interest. The number of new addresses joining the Uniswap network has dropped significantly, with only 10 new addresses recorded. Additionally, transaction counts remain low at 1,053, indicating reduced market engagement. A continued decline in network growth could dampen UNI’s price outlook further.
A notable development is the surge in UNI’s short liquidations, with $48.03K in short positions liquidated on Binance compared to just $10.1K in long liquidations. This imbalance suggests a potential short squeeze, where traders betting against UNI are forced to cover their positions—adding upward pressure to the price.
Despite Galaxy Digital’s whale activity, Uniswap faces a challenging market environment. The combination of weak network growth, high underwater positions, and critical price levels points toward a potential correction. However, the increase in short liquidations leaves room for a short-term relief rally.
Also Read: Uniswap Under Fire: Unichain Sparks Governance Concerns
Traders should closely watch UNI’s ability to maintain support at $7.50—failure to hold this level could lead to further losses, while a decisive rebound may set the stage for renewed bullish momentum.
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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