Key Takeaways
Will UNI’s uptrend continue now?
It might, but the lack of demand and on-chain accumulation may be a worrying sign of weakness from the buyers.
What can investors expect next?
The $8-$8.6 resistance zone will be a tough nut to crack. Underwater holders would add to the selling pressure if they look to exit the market at break-even.
On Monday, 17 November, Lookonchain reported that a wallet linked to Amber Group had accumulated 1.41 million Uniswap [UNI] tokens. The analysis went further, noting that 1.39 million tokens were deposited to Coinbase Prime, likely for custody.
Accumulation of this kind is encouraging news. Earlier this month, UNI saw a rally from $4.73 to $10.3. It broke a key swing level at $8.6, and shifted the market structure on the 1-day timeframe bullishly.
An AMBCrypto report last week highlighted that a price dip to $6.86 might be likely at that time. This price dip has since come to pass, and Uniswap has bounced by 8.9% in the last four days. Now, the $8-level serves as resistance to the bulls.
At the time of writing, on-chain metrics indicated there’s a good chance of further gains. However, the selling pressure, despite the upward price trend, might be a worry.
Difficulties ahead for Uniswap bulls
Source: Santiment
On 11 November, when Uniswap was trading at $10, the mean coin age saw a sizeable drop. At the same time, the age consumed metric jumped higher. Together, these two metrics revealed a flurry of previously dormant tokens being moved on-chain.
This kind of movement generally reflects selling intent, and may be followed by a price correction to $6.86. During and after this correction, it was hoped that the mean coin age would begin to trend higher again.
It did not, and it has slowly slid lower. This lack of network-wide accumulation seemed to be a sign that investors on-chain did not believe in the bullish chances of UNI. The MVRV ratio fell into negative territory too to show that holders were, on average, facing a loss.
The lack of confidence and holders at a loss mean that any price bounce could run into selling pressure from holders trying to exit at break-even.
Finally, the exchange netflow metric for the token showed high inflows on 10-11 November, in agreement with AMBCrypto’s assessment of a hike in sell pressure.
Source: Santiment
On a positive note, the 10k-1M UNI holding wallets have grown in number over the last two months. Not all whale wallets have bought more UNI. However, the behavior of this cohort is still interesting.
Source: UNI/USDT on TradingView
Despite the bullish daily structure, the OBV appeared to be in a severe downtrend at press time. It made a lower low during the retracement, highlighting heavy sell pressure.
Unless organic demand grows quickly, it might be difficult for bulls to keep the rally going beyond the $8-$8.6 resistance zone.
