Uniswap [UNI] faced a tough time on the price charts over the past three weeks. Many altcoins followed Bitcoin [BTC] higher in the first week of January, making strong gains. Some tokens continued to show strength.
UNI was the opposite. It showed bullish impetus a month ago, as the ‘UNIfication’ proposal crept closer to being passed. The vote concluded on the 25th of December and was passed with far more votes than the quorum required, highlighting its popularity.
The 100 million UNI burn, Uniswap Labs turning off frontend fees, and fee switches flipped on supported protocols were not enough to drive a rally. This relative weakness against Bitcoin and the wider market was concerning for bulls.
Analyzing the Uniswap on-chain and price action clues
In a post on X, crypto data intelligence platform Santiment pointed out that the top 100 largest wallets were accumulating. In the past 8 weeks, these wallets have added 12.41 million UNI tokens.
Their accumulation trends tie in well with the token’s price action, the post read. Going by past trends, the increased accumulation from the top wallets recently was awaiting a bullish reaction.
Will Uniswap prices rally from here?
The 180-day mean coin age plunged rapidly in the past three weeks. The dormant circulation metric also saw a large spike on the 26th of December. This signaled numerous previously idle tokens moving.
The mean coin age has not begun to trend higher, showing network-wide accumulation trends were lacking in the past two weeks. The 180-day MVRV ratio was still deeply negative, but it was the shorter-term MVRV that signaled a profit-taking threat.
Recently, the metric briefly moved into positive territory to show that short-term holders were at a profit. The demand was weak after the ‘UNIfication’ news, which saw prices slump below $6 once again, reflecting a lack of market conviction.
The price trend on the 1-day timeframe was firmly bearish. The failure to follow through after the breakout past $6 in December, combined with the A/D indicator, reflected sporadic buying pressure.
UNI was below its 20 and 50 DMAs. A drop below $4.73 would reinforce the bearish bias. Investors looking to buy UNI based on the top 100 wallets can use this level as their invalidation.
The more cautious investors can wait for the token to show strength before looking to buy it.
Final Thoughts
- Santiment data showed that the top 100 wallets were accumulating UNI, a pattern that generally sees prices rally.
- As things stand, this reaction hasn’t begun yet. On-chain metrics showed that short-term holders were happy to exit the market after a brief rally.
