UNI Price Surges 14.5%: Two Key Metrics Indicating a Bullish Trend

Uniswap’s UNI token has experienced a significant rebound, soaring 14.53% in the last 24 hours, with indications of a bullish trend supported by rising trading volume and market confidence. Key metrics, including Open Interest and short liquidations, point towards robust market activity, suggesting traders are optimistic about a potential breakout from a previous downtrend.

Key Takeaways

The UNI token rebounded from a descending channel, with increasing volume and renewed market enthusiasm.
Metrics such as rising Open Interest and short liquidations indicate strong momentum, although caution remains.
UNI climbed 14.53% to $6.75, pushing its market cap to $4.25 billion, with a notable 88.4% increase in trading volume to $476.86 million.
This surge reflects a revival of bullish sentiment in the DeFi sector as investors shift focus to promising mid-cap tokens.
Traders are hopeful for an upcoming breakout from the downward trend that initiated in August.

Uniswap UNI

Significant Rebound from Descending Channel

The price of Uniswap (UNI) has rebounded from the lower boundary of its descending channel where buyers had previously struggled to establish momentum. Currently, UNI is trading above $6.5, facing a critical resistance level near $7.1. This aligns with the upper trendline, which has restrained multiple rallies since August. A close above this resistance could signify a trend reversal, paving the way toward targets of $8.5 and potentially $10, should the upward momentum remain strong. Traders, however, should remain cautious, as rejection at this level may lead to a short-term pullback before another bullish attempt.

Uniswap price action
Source: TradingView

Open Interest Rises as Leveraged Traders Re-enter

Open Interest has surged by 26.92% to $353.45 million, confirming that more traders with leveraged positions are returning to the market with greater confidence. This notable increase suggests that many are betting on the continuation of an upward trend, bolstering UNI’s price breakout efforts. When Open Interest rises alongside increasing prices, it typically hints at new funds entering the market, affirming the strength of the existing trend. If this momentum persists, Uniswap may continue its journey toward the $8.5 resistance, with heightened volatility offering short-term trading opportunities.

Open Interest Data
Source: CoinGlass

Short Liquidations Indicate Weakening Bearish Momentum

Recent liquidation data unveils that $23.58K in short positions were liquidated compared to just $563 in long positions, signaling clear bearish exhaustion. This discrepancy shows that short sellers are being squeezed, which could amplify UNI’s price movement. As these short positions close, forced buying may further accelerate price rallies, a trend evidenced in previous UNI recoveries. The liquidations occurring near a crucial resistance point suggest that bearish traders are losing their grip, and the momentum might decisively shift toward buyers. If UNI manages to stabilize above $7, short covering could lead to more rapid tests of upper resistance levels.

Liquidation Data
Source: CoinGlass

Increase in Exchange Reserves Suggests Mild Selling Pressure

Uniswap’s total Exchange Reserves have risen by 14.65% to $555.66 million, indicating that some token holders are transferring their assets back to trading platforms, often a precursor to potential selling activities. Nevertheless, despite this rise in reserves, buying demand appears robust, with strong trading volumes consistently absorbing available supply. This dynamic suggests that any profit-taking is currently limited and not severe enough to reverse recent momentum. If demand endures, UNI could maintain its positive trajectory; however, an extended influx of tokens to exchanges could temper the recovery pace in the short term.

Uniswap Exchange Reserves
Source: CryptoQuant

In summary, Uniswap's 14.5% price surge, alongside increasing Open Interest and aggressive short liquidations, collectively showcase a renewed bullish sentiment in the market. Rising trading volumes reinforce this positive message, although the uptick in exchange reserves warrants a note of caution. A decisive daily close above $7.1 could validate the breakout and steer UNI toward the $8.5 target, confirming a structural trend reversal for the DeFi token.