Uniswap’s native token, UNI, recorded an 11.95% decline, reflecting a broader bearish sentiment engulfing the cryptocurrency market. According to AMBCrypto’s analysis, this steep drop appears largely influenced by whale activity, with other market participants also reducing engagement, further accelerating the downturn.
Whales Spark Selling Frenzy
Data from IntoTheBlock revealed a notable imbalance between bullish and bearish whales in the UNI market, with 12 bulls against 23 bears. This disparity tilted trading volume heavily in favor of sellers. Large-scale addresses, which include entities holding up to 1% of UNI’s total supply, traded 11.98 million UNI within this period, equivalent to $136.4 million. These sell-offs, primarily from the bears, drove the token’s sharp decline.
Beyond the whales, liquidity providers have also begun selling their UNI holdings, reducing the token’s usage across the ecosystem.
Broader Market Metrics Add Pressure
UNI’s troubles extend beyond whale activity, with key metrics indicating a bearish outlook. Uniswap’s Total Value Locked (TVL), which measures the amount of assets deposited in its liquidity pools, dropped from $5.937 billion to $5.584 billion. This decline signals that participants are withdrawing their funds, likely selling off their holdings in the process.
Similarly, transaction fees have halved, falling from $9.24 million on January 20 to $4.49 million. This decrease underscores reduced trading activity and an overarching bearish sentiment across the market.
Consistent Trader Activity Offers Hope
Despite the downturn, the number of unique traders, represented by active UNI addresses, has remained steady, fluctuating between 88,700 and 94,700. This consistent activity suggests that while sell-offs dominate, the underlying adoption of UNI remains stable.
For a potential recovery, an increase in active traders could provide upward momentum, mitigating the impact of whale sell-offs and restoring bullish sentiment. Until then, UNI’s price trajectory remains vulnerable to the influence of large market participants.
Also Read: Uniswap V4 Upgrade Nears: Technical Analysis Suggests UNI Price May Drop Further
As UNI navigates this turbulent period, market watchers will be eyeing shifts in trading activity and participation rates to gauge the token’s next move.
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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