The Surge of Uniswap Reaches a 4-Month Peak, Yet Profit-Taking Stalls the Momentum – What Comes Next?
Uniswap [UNI] has experienced a significant uptick in volatility within the past 24 hours, with its price fluctuating between $8.83 and $9.63. This spike in volatility coincided with an increase in large transactions involving whales.
Data sourced from IntoTheBlock indicates that in a single day, large transactions exceeding $100,000 surged from 3.05 million to 21.39 million, marking a whopping 500% rise.
Given that these hefty traders were likely making purchases, it is plausible that they were the driving force behind the recent upsurge. It is worth noting that whales hold 51% of UNI’s circulating supply, while retail investors only hold 16%.
Hence, any significant increase in whale transactions is expected to have a notable impact on the cryptocurrency’s volatility.
Can Uniswap Be Set for a 30% Climb?
At the time of writing, UNI was trading at $8.93. The recent rally saw a pause due to exhaustion among buyers after the price reached a 4-month peak of $9.63.
Analysis of the volume histogram bars on the one-day chart revealed a considerable boost in buying pressure. Additionally, the Relative Strength Index (RSI) climbed to 62, indicating that bullish momentum was being fueled by buyers.
Despite a slight price pullback, the Moving Average Convergence Divergence (MACD) suggested that the bulls still held dominance. The positive flip of the MACD line alongside the histogram bars signifies continued bullish control.
For the upward trend of Uniswap to persevere, there must be a stronger backing from buyers. This could spark a 30% upsurge towards the next resistance level at the 1.618 Fibonacci mark of $11.60.
However, lacking a fresh surge in buying interest could weaken the uptrend. Traders should monitor the support level at $7.34 since a breach below it might spur a downtrend.
Profit-Taking Obstacles Arise
Sellers are currently positioned to trigger a restart of bearish trends. According to exchange inflow data from CryptoQuant, over the past two days, traders have transferred more than 9 million UNI tokens to exchanges.
When tokens are deposited onto spot exchanges, it signifies preparedness for selling, potentially hindering further gains. Nonetheless, there has been a surge in deposits on derivative exchanges, which could induce heightened volatility if UNI open positions see an increase.
The derivative market also witnessed a surge in forced liquidations of short open positions. Data from Coinglass disclosed that within a span of less than 48 hours, over $2.8 million worth of UNI short positions were liquidated.
Short liquidations usually trigger buying activity as short sellers are compelled by buyers to close their positions. With a growing bullish sentiment surrounding UNI causing more forced liquidations, the altcoin may trend upwards.