Uniswap Faces Major Support Break: Is a Larger Decline Ahead for UNI?

Uniswap (UNI) has recently broken a crucial support level that it had maintained since June 2022, raising concerns of further declines in its price. Intraday trading activity shows an increasing number of traders betting on short-leveraged positions, which further signals the potential for a downward trend.

Key Takeaways

UNI has lost significant support at $4.10, leading to bearish price action.
The current price stands around $3.85 after a 5.10% drop.
The Average Directional Index indicates a lack of strong momentum, while the Money Flow Index shows neutral market conditions.
Traders are leaning bearish, with notable interest in both short and long positions.
Long-term investors seem to be accumulating UNI despite the decline.

Uniswap breaks multi-year support: Will UNI see a larger crash?

Uniswap's Price Movements and Key Support Levels

In the midst of a bearish market, Uniswap (UNI) has recently dropped below a significant support level that has held since June 2022. This shift in momentum raises questions about the asset's future, as increased short-leverage positions among intraday traders suggest that additional declines may be on the horizon.

Currently, UNI's price has decreased by 5.10%, trading around $3.85. Additionally, trading volume has dipped by 9%, totaling $395 million, which reflects increasing apprehension among traders and investors.

Uniswap (UNI) price action

Source: TradingView

Reviewing the weekly chart, it is clear that UNI has fallen below the critical support level at $4.10 and has closed a weekly candle under this mark. This support was in place since March 2022. The recent breakdown indicates a bearish trend, suggesting that a significant drop could be forthcoming.

With past price performance as a benchmark, if UNI does not regain the $4.10 level, it could potentially fall by another 45%, reaching a support level around $2.30. However, the Average Directional Index (ADX), which gauges trend strength, is currently at 20.32—below the crucial threshold of 25—indicating the asset lacks strong directional momentum. Meanwhile, the Money Flow Index (MFI), which measures buying and selling pressure based on price and volume, sits at 44.32, suggesting a neutral market without a clear advantage for either buyers or sellers.

Mixed Sentiments in Derivative Data

When examining the derivatives market, intraday traders show they are closely aligned with the current trend. Data from the derivatives analytics platform, CoinGlass, reveals high interest levels at $3.69 for downside positions and $3.99 for upside positions. At these levels, traders have constructed approximately $1.63 million in long-leveraged positions and $2.10 million in short-leveraged positions, indicating a current bearish sentiment.

UNI Exchange Liquidation Map

Source: CoinGlass

Nevertheless, long-term investors seem to be utilizing the recent price decline to accumulate UNI tokens. According to CoinGlass, there was a slight outflow of $1.26 million in UNI from exchanges over the last 24 hours, suggesting that investors may be accumulating rather than selling. In the crypto world, outflows from exchanges to personal wallets generally signal accumulation activity.

UNI Spot Inflow/Outflow

Source: CoinGlass

Conclusion

Uniswap’s current technical analysis indicates a potential for further downside movement if the price fails to bounce back from critical support levels. While intraday trader sentiment appears bearish, long-term investors are showing signs of accumulation. This contrast creates a complex outlook for UNI, where both strategies may play out in the evolving market. Keeping a close watch on the indicators will be essential for understanding future movements of this cryptocurrency.