Uniswap Whales Sweep Up Supply, But UNI Price Stagnates

Uniswap (UNI) has faced significant challenges after a recent price breach, with whales capitalizing on market dips. Despite increased whale activity, UNI's price remains under pressure, leading to uncertainty about its near-term recovery.

Key Takeaways

Uniswap attempted a breakout but faced rejection at $5.8, leading to a decline to $4.92.
Whale investors have started buying during price dips, indicating potential confidence in a market recovery.
Despite increased whale purchases and positive signs in demand, UNI struggles to break through key resistance levels.
Technical indicators show UNI is currently under bearish pressure, with the possibility of further declines if demand does not strengthen.

Whales absorb Uniswap supply, but UNI's price refuses to follow

Uniswap's Price Struggles Amid Whale Activity

Following a failed breakout attempt at $5.8, Uniswap [UNI] has faced a series of challenges, trading within a descending channel and deeply impacted by a recent market downturn. As it stands, UNI is priced at $4.92, reflecting a 1.29% drop over the day, marking a week-long decline.

Whale Behavior Influences Market Dynamics

After the price peaked at $5.8, whales began to cash in their profits, which increased the whale momentum to 6.2. This profit-taking reduced the upward momentum for UNI and halted further price gains, causing the whale momentum index to decline to 5.6, subsequently impacting prices by 4.46% negatively.

Uniswap whale hunter
Source: TradingView

The resulting price drop indicated that as these whales exited, the remaining buyers lacked the strength to push prices higher. In the midst of these market fluctuations, on-chain analytics from Lookonchain revealed a notable whale activity—one whale sold 798,734 UNI for $4.26 million at $5.33. Following this sale, UNI's price continued to slide down to a low of $4.5 before experiencing a minor rebound.

Interestingly, this whale took advantage of the market dip to re-enter and purchase 757,684 UNI at $4.83 each, amounting to $3.66 million, reflecting a shift in market sentiment. When whales engage in buying during downturns, it often signals their confidence in an eventual market recovery.

Uniswap spot netflow
Source: Coinglass

Demand Indicators Suggest Possible Recovery

Alongside whale purchases, signs of recovery in demand are becoming evident, as Buyer’s Strength surged to 96 and seller dominance decreased to 3.5. This shift is notable compared to the previous day when sellers dominated significantly, closing at 67.

Moreover, Uniswap’s Spot Netflow has shown a negative trend over the past four days, indicating heightened spot demand. At the time of reporting, the Netflow stood at -$290k, a reduction from -$3.13 million the day before. With buyers currently outpacing sellers, a potential market recovery looms on the horizon—provided buyer strength is sufficient to overcome existing market pressures.

Will Increased Demand Propel UNI's Price?

Although whale purchases suggest a potential uptick in demand, they have yet to create a sustained upward momentum for Uniswap. The altcoin's Relative Strength Index (RSI) has increased from 32 to 35, yet it remains firmly in bearish territory.

Additionally, UNI continues to trade below its short-term moving averages (the 19- and 21-MAs), illustrating persistent downward pressure on the price.

Uniswap RSI
Source: TradingView

Given the current bearish market dynamics, UNI appears structurally weak in its attempt to surpass the $5 mark and may drop back to around $4.5. However, if whale demand continues and is bolstered by an increase in buyer strength, there is potential for UNI to reclaim its moving averages and aim for the key resistance level at $5.8.

Conclusion

As whale activity indicates a mixture of buying and selling pressure in Uniswap, the future of UNI hangs in the balance. While recent purchases from whales and a slight rebound in demand hint at potential recovery, significant resistance still limits UNI's upward movement. Investors will be watching closely to determine if these trends can shift in favor of a more robust price recovery.