- UNI reserves on exchanges hit new highs.
- The decline in interest in whales, declining MVRV ratio, and reduced user activity raised concerns about UNI’s performance.
from Uniswap [UNI] reserves on stock exchanges have risen to record levels, according to data from analyst Kate Young. The increased amount of UNI on centralized exchanges can be interpreted as a bullish sign. This suggested increased interest and demand for the token.
Realistic or not, here is UNI’s market cap in terms of BTC
On the other hand, significant reserve of UNI on centralized exchanges can also be considered bearish. This may be due to the possible intention to sell or exit positions.
$UNI reserves on centralized exchanges reached an all-time high.https://t.co/Fnf37rCYMc pic.twitter.com/hCAxYZcrPX
— Kate Young Ju (@kate_young_ju) June 10, 2023
Whales swim away
Despite UNI’s rising reserves on exchanges, the number of whales UNI holds has been declining. This decline in interest in whales could have a detrimental effect on the price of UNI.
When whales reduce their positions, it often leads to increased selling pressure and can lead to downward price movements. In addition, a high interest in whales can also lead to centralization, potentially making small investors more vulnerable to market manipulation.
The MVRV ratio for UNI, which compares the token’s market value to its realized value, was down significantly at the time of writing. This suggested that most of the holders were not profitable at the time of going to press, as the price of UNI has fallen significantly.
The declining MVRV ratio indicated that selling pressure on UNI had eased, potentially creating an opportunity for price recovery.
However, it is worth noting that the Long/Short difference for UNI shows the prominence of short-term holders compared to long-term holders. This imbalance may indicate that traders have a shorter-term view and are more inclined towards quick trades rather than long-term investments.
Source: Sentiment
Uniswap traders are getting cynical
When examining investor sentiment, data from Coinglass indicated that the number of short positions outnumbered the number of long positions for UNI. This suggested that bearish sentiment was prevalent among traders in the near term.
Source: mint glass
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Shifting the focus to the protocol itself, there has been a notable 49.8% drop in the number of daily active users on the Uniswap protocol over the past month.
The reduction in the number of daily active users has resulted in a significant drop in fees generated, which may impact the sustainability and growth of the UNI ecosystem.
Source: Token Terminal
