Following the recent market crash and a weakened structure, Uniswap [UNI] slipped to a two‐year low. The altcoin fell to $4.1, a level last seen in November 2023, before staging a modest rebound.
At press time, UNI traded at $4.15, down 1.14% on the daily charts, reflecting increased volatility.
Uniswap whale dumps 2.49M UNI
After UNI] experienced a massive slump, a long-term holder panicked and offloaded his entire UNI holdings. According to Arkham data, a dormant whale returned after five years and dumped 2.49 million UNI for $10.62 million.
This whale sold these tokens after holding them for five years, having purchased them in the early days of Uniswap. With the sale, the whale realized $1.72 million in profit, up only 19% in five years.
Usually, when whales sell during a market downturn, it signals a lack of confidence in the market and a fear of further losses.
Selling pressure shoots up!
In addition to the noted whale sell activity, Uniswap experienced a substantial sell-off by other market participants on the 30th of January.
According to CryptoQuant, Exchange Inflow surged to a two-month high of 4.2 million UNI, then fell significantly as of writing. At the same time, the altcoin recorded 1.7 million in Exchange Outflow.
With Exchange flows soaring, the Exchange Supply Ratio climbed to a two-month high of 0.09. Often, a rising supply ratio suggested increased distribution, further rising dump risk.
Historically, such market conditions have led to reduced scarcity, thereby further accelerating downward pressure, often a prelude to lower prices.
Is $4 support at risk?
Uniswap dropped significantly as investors, both retail and traders, panicked and sold, further accelerating the downtrend.
As a result, the altcoin’s Relative Strength Index (RSI) dropped deeper into the oversold territory, hitting a low of 27 at press time.
When RSI drops to such extreme levels, it signals seller dominance in the market. At the same time, Uniswap’s Relative Vigor Index (RVGI) fell to -0.12, after making a bearish crossover.
With RSI and RVGI dropping to such extreme lows, it suggests strong downward momentum, with sellers dominating the market.
Often, such market conditions signal downside risk and the potential for its continuation. Therefore, if sellers continue to sell, UNI could breach the $4 support level and drop towards $3.8.
However, if holders take this opportunity to buy at a discount, Uniswap could hold above $4 and reclaim $4.8 in the event of a significant reversal.
Final Thoughts
- Uniswap dropped to a 2-year low of $4.11 before slightly rebounding to $4.19 at press time.
- A UNI whale woke up after five years of dormancy and dumped 2.49 million UNI for $10.62 million.
