Uniswap’s native token, UNI, is facing a crucial moment as exchange reserves have surged over the past 24 hours, according to CryptoQuant. The increase in exchange reserves suggests that more market participants are moving their UNI holdings to trading platforms, potentially to sell. Historically, such behavior has led to price declines due to increased supply pressure.
Bearish Indicators Suggest Downward Risk
As UNI’s exchange reserves rise, the token faces significant sell-side pressure. If this trend persists, the altcoin may experience further downward movement. At press time, UNI was trading around the $6.625 mark, which is a historically strong demand zone. A breach of this support level could push UNI to test lower price levels, reinforcing the bearish outlook.
Technical and On-Chain Developments Indicate a Possible Rebound
Despite the selling pressure, some technical indicators suggest a potential reversal. UNI’s Relative Strength Index (RSI) is currently in the oversold territory, signaling that the token might be undervalued. If buying pressure intensifies at these levels, a short-term price recovery could be in the cards.
Adding to the optimism, Uniswap Labs recently announced that Unichain crossed $1 billion in trading volume on the Uniswap Protocol. This milestone underscores Uniswap’s continued dominance in the decentralized finance (DeFi) sector. If this growing activity translates into increased UNI demand, it could help counterbalance the current selling pressure.
What’s Next for UNI?
The battle between mounting sell pressure and bullish technical signals makes UNI’s next move uncertain. If selling activity remains dominant, UNI may dip further to test lower support zones. However, should buyers seize the opportunity presented by the oversold RSI and strong on-chain metrics, a relief rally could emerge.
Investors should closely monitor UNI’s price action and trading volume for signs of a definitive trend. Whether UNI succumbs to bearish forces or stages a comeback will largely depend on market sentiment and continued on-chain growth.
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.
Also Read: Uniswap (UNI) Price Prediction: Will a Key Buy Signal Trigger a Bullish Reversal?
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