Whales, burns help Uniswap break $4 – But bears fight back at $4.60

Uniswap [UNI] is up more than 10%, only second to Aave Protocol [AAVE] among all the top-capped DeFi protocols. The daily trading volume was significant, up more than 20%, at around $521 million.

The altcoin was driven by institutional and whale positioning, an increase in burn rate, and growing network activity.

Why is Uniswap’s price action bullish?

An anonymous institutional wallet withdrew more than 222K UNI tokens worth more than $960K after eight months of inactivity. The wallet continues to accumulate, bringing the total holdings to 4.837 million, valued at $22 million.

All the tokens have left the Coinbase wallet, and the position was up more than 7.32% in 24 hours as of press time.

In addition, whales were also positioning themselves. Three wallets from whales were aggressively buying UNI from Upbit, hinting that the Asian participants were pumping capital into the protocol.

These wallets moved over 146K UNI, worth $647K, from Upbit’s hot wallet to a cold wallet. During the same period, 47.563K UNI, costing more than $209K, were transferred from Binance’s hot wallet to Wintermute’s market-making address.

On the other hand, the three wallets sold 9.6 million POL, costing over $1 million. This indicated they had more belief in the UNI project than in that of Polygon.

A look into Uniswap’s burn rate!

Aside from the accumulation, Uniswap’s burn rate was hitting new milestones. The altcoin recorded its biggest daily burn in USD, totaling about $590K, on the 21st of August.

In terms of where these fees came from, Ethereum [ETH] contributed $267K, while Base and Robinhood Chain accounted for $165K and $87K, respectively.

The same week saw the second-highest daily burn of 150K UNI tokens. Therefore, the burn rate reduced the circulating supply of the token, resulting in this uptrend.

Can UNI stay above the $4.20 zone?

Despite the altcoin trending higher on the charts, UNI was facing resistance in the $4-$4.60 zone. The move was after breaking above the zone, which is the top of the sideways range.

The price is testing the 9-EMA in the 4-hour chart, indicating a short-term reduction in bullish strength. However, the price is still far from the 9-EMA on the daily chart.

Furthermore, the transfer count of UNI on the Binance exchange increased sharply, rising from 8.57K to 24.3K. This showed network activity had increased by almost a 3x magnitude.

Even with that, the Up/Down Volume was dominated by bears at the time of press. This disparity is because bears kicked in at the $4-$4.60 supply zone, supplying $2.17 million against $1.26 million from bulls.

As such, it could bring about a correction back to the range. Otherwise, holding above the zone would extend the uptrend unless $3.22 is lost as support.

Final Summary

• Uniswap rallies more than 10% amid institutional and whale positioning alongside an increasing burn rate. 
• Uniswap broke above the $4-$4.60 zone, where it is now facing resistance to further its uptrend.