Uniswap’s road to $8 – Here’s how to examine the mixed signals on the charts
Uniswap traders and investors should not be overly bullish, but a pessimistic outlook was not warranted either.
- Metrics and indicators gave room for market participants to be cautiously bullish
- Price action revealed upward momentum since May, with periods of high volatility
Uniswap [UNI] has faced a difficult road for much of the year. The DEX token registered a 74% drop from December’s high of $19.47 to April’s low at $4.55.
However, since mid-May, the price has slowly trended higher, with the 50-day moving average acting as a strong support level. At the time of writing, the activity on-chain suggested that the DEX may be getting more traffic.
The 7-day moving average of the transaction count revealed that Uniswap token transactions have been rising since mid-April. It has continued to trend higher since, underlining greater demand for UNI and respectable levels of usage.
The DEX itself also saw heightened trading volume in May and June, compared to April. However, the trading volume began to tail off towards the end of June and the start of July. Could this be an early sign of trouble for Uniswap’s price?
Uniswap Futures and spot activity signal clashes
The aforementioned CryptoQuant metric measures the level of UNI retail activity using their trading frequency and position size.
High retail activity tends to mark an overextended market and could help spot local tops. December 2024 and January 2025 saw high Futures retail activity. Similarly, high activity levels were seen in recent weeks.
On the other hand, the spot taker CVD over the past three months has been bullish since mid-May.
At press time, the 90-day spot CVD was positive and rising – Indicating a taker buy dominant phase. This finding seemed to be at odds with the retail Futures activity. The aggressive taker buys, or market orders, could be a stronger sign than heightened Futures activity.
Finally, the 1-day price chart highlighted bullish momentum. The RSI was above neutral 50, and the price was above the 20 and 50-day moving averages. However, the CMF was at -0.1, showing significant capital outflows. Once again, there seemed to be conflicting signals around the next direction of Uniswap.
Putting all the evidence together, it may be likely that the $8 resistance zone would see greater volatility. Especially since it seemed to be a short-term level of importance.
Swing traders looking to go long can do so once $8 is flipped to support. Meanwhile, market participants should be wary of a bearish reversal, even though the 90-day spot CVD showed buyer dominance.
