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Should UNI traders expect a sell-off or a price reversal next?

2min Read

Despite the gradually increasing selling pressure, Uniswap’s technical sentiment remains positive.

Should UNI traders expect a sell-off or a price reversal next?
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  • UNI’s exchange reserves surged recently, hinting at a hike in selling pressure for the token
  • Altcoin’s technical indicators and Unichain’s $1 billion volume milestone could aid a reversal

Uniswap’s native token, UNI, has seen a surge in exchange reserves over the last 24, hours according to CryptoQuant’s report. What this means is that more market participants are moving their UNI tokens to exchanges, possibly to sell.

In the past, this kind of behavior has led to price drops as more supply meets market demand. If this keeps up, UNI could see downward pressure on the charts. 

On the contrary, however, technical and ecosystem developments seemed to hint at a potential reversal in the near term.

Source: CryptoQuant

A glimpse of hope for UNI bulls?

Despite sell-side pressure, UNI’s $6.625 price level has been probing a strong demand zone. The zone has historically acted as a solid support, generally compelling several reversals.

To add to the optimism, the altcoin’s RSI (Relative Strength Index) was in the oversold territory at press time. The indicator suggested that UNI could be under-priced and therefore, a bounce becomes probable if the buying appetite intensifies.

If bulls save the day, a short-term rally could be on cards for UNI. 

Source: TradingView

On-chain metrics point to a potential rally

Interestingly, UNI on-chain activity also lent some positive insights. Unichain recently crossed $1 billion in volume on the Uniswap Protocol, according to a recent Uniswap Labs tweet.

The milestone only serves to highlight Uniswap’s sustained popularity in the DeFi space. If this growth is mirrored in higher UNI demand, it could neutralize the selling pressure.

The fight between mounting selling pressure and technical reversal signals makes the next move by UNI uncertain. Under dominance of increased selling pressure, the altcoin could go lower to test lower support levels.

However, if the buyers capitalize on the current oversold condition and positive on chain developments , a relief rally can emerge.

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Kelvin Murithi is an Economic and Crypto-Asset Analyst at AMBCrypto who provides a sophisticated, data-driven perspective on the financial markets. His analysis is deeply rooted in his academic and professional background, combining macroeconomic principles with technical asset analysis. He holds a Bachelor's degree in Economics and Statistics, which provides the rigorous quantitative foundation for his work in economic forecasting and investment strategy. Prior to specializing in the digital asset space, Kelvin honed his skills as a Financial and Data Analyst, where he was responsible for analyzing complex datasets and financial models. At AMBCrypto, Kelvin leverages this powerful blend of experience to deliver insightful price analysis. He specializes in interpreting how broader economic trends impact the cryptocurrency market, while also applying technical analysis to identify key price levels and potential trading opportunities. His mission is to equip readers with a multi-layered understanding of the market, enabling them to make strategic and well-informed investment decisions.
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