As of the latest data available, Uniswap [UNI] appears to be displaying a robust bullish outlook. Since 20 November, it has surged by 97%, successfully breaching several significant resistance levels along the way. The Open Interest has also seen a 12% increase in just 24 hours, indicating strong bullish sentiment in the market.
Both technical indicators and on-chain analytics point towards a solid upward trend for Uniswap at the moment. This suggests that there could be further potential for gains in the upcoming months. Despite UNI still trading 61% below its all-time peak of $44.9 recorded in May 2021.
Critical previous lower peaks now acting as support levels
The Uniswap bulls have managed to surpass the $17.05 threshold, a level that represented the peak from March 2024. In addition, the significant lower peaks from the previous downtrend, positioned at $12.93 and $14.64, have both been revisited and are now functioning as support levels.
The On-Balance Volume (OBV) has been sharply ascending alongside the price, indicating significant buying pressure. While the Relative Strength Index (RSI) was in the overbought zone at the moment, there is yet to be a bearish divergence. A possible scenario could involve a consolidation within the $16-$17 range before the next upward movement in the weeks ahead.
Furthermore, the zone between $15.45 and $15.95 is anticipated to act as a strong support area if UNI experiences a downward correction.
Emergence of new user addresses awaiting an upswing
In the previous market cycle, the introduction of a multitude of small-cap tokens on the Ethereum blockchain resulted in a surge of new addresses engaging on Uniswap, the primary decentralized exchange (DEX), for token trading. A similar trend is currently unfolding on the Solana [SOL] network, particularly during the memecoin frenzy.
The escalating number of new addresses and increased participation often coincide with higher fees, particularly during the advanced stages of a bull market. When compared to 2024, the count of new addresses and network fees were still below their peak levels in 2021.
While these metrics point towards potential long-term growth opportunities, other indicators hint at a possible short-term decline. Uniswap witnessed a distribution phase in October and early November, characterized by a decline in the average coin age.
Meanwhile, the MVRV ratio has surged upwards, reaching levels seen in March, signifying increased profitability. This suggests that the token might be significantly overvalued. As a result, traders and investors are advised to consider taking profits and anticipate a dip before considering additional UNI investments.