Since falling to a low of $7.00, Uniswap has exhibited upside momentum on the charts, closing at higher highs for two consecutive days.
In doing so, the altcoin rose to a local high of $7.54 before a slight slip. At the time of writing, Uniswap was trading at around $7.52 after rising slightly by 1.26%.
However, trading volume continued to decline, dropping by 47%. This hinted at reduced market activity as investors waited for a clear market direction across the board.
Uniswap whale transfers $13.18 million in UNI
With Uniswap on its back foot, some whales may be choosing to exit too. According to Lookonchain, for instance, a trader withdrew 1.79 million UNI, worth $13.18 million, from Venus Protocol and deposited it on Binance.
The trader bought UNI a year ago at an average price of $9. After the recent rally, these holdings saw significant gains.
However, following the latest trend reversal, the trader’s holdings were sitting at a loss at press time. If sold at the press time levels, he would realize approximately $3 million in losses.
The trader’s decision to make such a transfer could allude to a lack of confidence in the market. However, the transfer alone is not a confirmation that a sale occurred.
Typically, selling by large holders increases the available supply and can add further downside pressure.
Is the pressure cooling down?
Despite the potential selling pressure from the trader, other investors, particularly in the spot market, appeared to have a different view of the market.
While Uniswap traded below $8, traders continued to accumulate the altcoin. According to CryptoQuant’s Exchange Netflow data, the metric remained negative for three consecutive days and continued to fall.
Over the past day, for example, the altcoin’s Exchange Netflow fell to a low of -624K. The declining Netflow suggested that more assets have recently left exchanges.
Spot Taker CVD further seemed to support this observation. The altcoin’s Taker CVD remained positive over the past week, suggesting that buyers extended their dominance.
Typically, sustained spot buying can absorb some of the selling pressure and help prevent further price declines.
What’s next for UNI?
Although some buying activity has returned, the renewed demand has not been strong enough to trigger a trend reversal.
At the time of writing, the market was still leaning bearish. For instance, Uniswap’s Relative Strength Index (RSI) remained in bearish territory at 46.
At the same time, UNI traded below the 20-day EMA and was testing the 50-day EMA. Holding below the short-term MA could hint at the prevailing pressure, but the 50-day EMA could sit as a strong support.
The prevailing market conditions suggested that demand remains insufficient to trigger a notable rebound. This leaves the altcoin at a risk of further price drop or extended consolidation.
Having said that, Uniswap is likely to hover between $7.1 and $7.5. On the other side, if demand strengthens enough, the altcoin could reclaim $8 and target $8.2.
Final summary
- A trader withdrew 1.79 million UNI, worth $13.18 million, from Venus Protocol and then deposited it on Binance.
- Uniswap [UNI] rose slightly to $7.5, but the market momentum is still leaning bearish.