Uniswap: Can $1 mln in whale buying help UNI reclaim $4?

UniSwap [UNI] has traded within a descending channel since it breached the $4 level a week ago. The altcoin dropped to a low of $3.3 before rebounding slightly, indicating strong downward pressure. 

The altcoin has largely struggled due to a lack of major capital flow. During this period of prolonged weakness, it seems that major investors, especially whales, have stepped back from the market. 

Spot Average Order Size data from CryptoQuant showed both whales and retail have remained extremely calm. This metric has shown neutral order flows, with both major players showing minimal involvement. 

Historically, markets have tended to weaken when large capital holders scale back and sit on the sidelines. Now, it seems some whales are attempting to reenter the market again. 

Uniswap whale purchases 299,454 UNI worth $1.03 million

With UNI struggling, some whales are taking the opportunity to accumulate at a discount. 

According to Onchain Lens, a whale spent $1.03 million to buy 299,454 UNI. After the recent purchase, the whale now holds 763,061 UNI worth $2.7 million.

The whale adding positions during a period of significant weakness signals confidence in the asset’s prospects. In addition to this whale demand, market demand has gradually and sustainably shown signs of recovery. 

Exchange activities confirm this recovering demand. According to CryptoQuant data, Uniswap has recorded a negative Exchange Netflow for four consecutive days. 

At press time, Netflow was -1.1k UNI, a significant drop from -460k the previous day. Over the past week, exchanges have recorded a positive netflow only once. 

As a result of these sustained outflows, supply on exchanges has declined significantly. In fact, the Exchange Supply Ratio dropped to a two-week low of 0.088. 

Such a drop in ESR suggests buyers have returned with strength and accumulated significantly. Historically, such a setup on exchanges has preceded stronger upside momentum, leading to higher prices. 

Is the demand enough for UNI?

Although the demand has shown a considerable recovery, the market remains structurally weak. The altcoin remains below its momentum moving average and the positive feedback of the moving averages.

With the price below MaMA and Positive Feedback, it suggests the downside risk remains stronger than the upside movement.

At the same time, the Relative Strength Index (RSI) remains below its signal line. The RSI currently sits around 50, while the signal line sits at 60.

Such a setup suggests that sellers remain extremely active; although buyers have returned, the demand remains insufficient. Under these circumstances, UNI is highly likely to continue trading between $3.2 and $3.6.

However, if the demand strengthens, driven by returning whales, Uniswap could flip MaMA at $3.6 and eye $4 resistance.

Final Summary

• A Uniswap whale purchased 299,454 UNI worth $1.03 million, raising holdings to 763,061 UNI worth $2.7 million.
• UNI’s demand is gradually recovering, but the market remains structurally weak.