Uniswap slides 10%, below key support level: Will sell pressure lead to more losses?
Uniswap declined 10%, breaching the $3.9 support level to a three-week low of $3.4.
Uniswap [UNI] is under massive downside pressure. After holding between $3.9 and $4, this consolidation range broke down. As a result, $3.9, which has acted as support the past week, failed to hold, with UNI plunging to a low of $3.4.
As of this writing, Uniswap was trading around $3.5, marking a 10.5% drop on the daily charts. However, the altcoin trading volume surged 151.8% to $319 million, suggesting rising activity on the sell side.
Uniswap $3.5 million in long liquidations sparks panic
This sudden market drop triggered a massive wave of long liquidations. According to CoinGlass data, over $3.25 million worth of long positions were liquidated.
With the risk of liquidation surging, traders who had long positions panicked and increased spending significantly.
Over the last 24 hours, UNI saw $137 million in Futures outflows compared to $106 million in inflows. As a result, the altcoin’s Futures netflow dropped 328% to -$31 million, a clear sign of aggressive selling in the Futures market.
The increased selling activity on Futures further weakened the market, leading to a price decline.
Spot sellers show more determination
After Uniswap [UNI] failed to defend the key support level, traders, especially on the Spot, panicked. Most of them sold their holdings, fearing making more losses.
Exchange activity confirms this bearish shift. According to CryptoQuant, Uniswap’s exchange inflow surged to 5.1 million while outflows also rose to 3.9 million.
As a result, altcoin’s exchange netflow rose to a monthly high of 1.2 million. The rising inflows and outflows showed both buyers and sellers stepped into the market as the market slip continued.
However, sellers showed greater determination and overpowered buyers. Historically, such market conditions have often preceded weaker price action and more losses on the price charts.
What’s next for UNI?
Uniswap is overrun by sellers across the market, and the downside risk is higher than ever. For starters, the altcoin positive index continued to decline, falling from 26 to 19 at press time.
At the same time, the ADX rose from 34 to 40 while the negative index climbed from 14 to 13. When ADX and -DI are rising while the +DI is falling, it reflects strengthening downside momentum and weakened bullish momentum.
The Relative Vigor Index [RVGI] further confirms this bearish structure, holding on a downtrend for five consecutive days.
Taken together, these two indicators point towards the likelihood of some more losses on Uniswap’s price charts. Therefore, if selling pressure continues to rise from all directions, UNI is likely to lose the $3.4 support with $3.0 as the next key levels.
Final Summary
- UNI declined 10%, breaching the $3.9 support level, to a three-week low of $3.4.
- Uniswap dropped as traders across the market panicked and hurriedly closed their positions.
