Uniswap [UNI] has recently experienced a significant surge, driven by a substantial $38 billion in monthly trading volume on Ethereum Layer-2 networks such as Base, Arbitrum, Polygon, and Optimism. This uptick in activity has resulted in a strong bullish sentiment, with UNI trading at $12.95 as of the latest data – marking a 2.16% increase in the past 24 hours.
With the continuous increase in liquidity and usage, UNI is currently at a crucial juncture. Will it be able to sustain this positive momentum and surpass key resistance levels, or is a potential downturn on the horizon?
Are the On-Chain Signals Signaling Further Bullish Movement?
Analysis of Uniswap’s on-chain data uncovered several bullish signs. Network growth exhibited a moderate rise of 0.34%, indicating a growing user base. Moreover, in-the-money transactions saw a 1.56% increase, suggesting that more investors are in profitable positions.
Furthermore, there was a 0.04% increase in concentration, hinting at increased confidence among token holders.
Notably, there was a significant spike of 6.92% in large transactions, underscoring the rising participation of institutional investors and major traders – a signal that significant players are positioning themselves for potential gains in UNI’s price.
What Does UNI’s Price Movement Suggest About Its Future?
Currently testing the $13 resistance level, Uniswap’s price is at a crucial juncture. A breakout above this level could propel UNI towards $17, the next anticipated resistance point.
However, with the Relative Strength Index (RSI) at 71.56, suggesting near overbought conditions, investors should exercise caution as there may be corrections or consolidation before any significant breakthrough.
Exchange Reserves and Liquidations – Mixed Signals Ahead?
Over the last 24 hours, Exchange Reserves witnessed a modest uptick of 0.12%, bringing the total UNI token reserves to 68 million. This uptrend indicates that investors might be holding onto their tokens or gearing up for potential sales based on market outlooks.
Meanwhile, total liquidations revealed a higher concentration of long positions – with $334.85k in long positions and $71.35k in short positions. This discrepancy implies that the majority of traders are optimistic about sustained bullish momentum.
Nevertheless, this setup also exposes UNI to short squeezes in case the market turns against the long positions.
Will UNI Sustain Its Upward Trajectory?
Uniswap’s recent price surge, coupled with robust on-chain signals and an uptick in large transactions, suggest a positive trajectory for the token. However, caution is advised as the RSI nears overbought levels, and the exchange reserves exhibit mixed signals.
A breach above $13 could drive UNI’s price higher, but the possibility of a retreat should not be disregarded. Therefore, if UNI maintains its current momentum and overcomes the resistance levels, further gains could be anticipated.