As of the current moment, Uniswap [UNI] appears to demonstrate a strong bullish trend, having surged by 97% since November 20. The cryptocurrency has also managed to surpass multiple significant resistance levels along the way, with its Open Interest increasing by 12% within a 24-hour span – a clear indication of bullish sentiment prevailing in the market.
Both technical indicators and on-chain analytics suggest that Uniswap is currently on a robust uptrend, signaling the potential for further growth in the upcoming months. Despite this positive momentum, UNI is still 61% below its all-time high of $44.9 recorded back in May 2021.
Retesting Crucial Lower Highs as Support Levels
Bulls for Uniswap successfully overcame the $17.05 threshold, a level that previously acted as the high point in March 2024. Notably, the key lower highs established during the prior downtrend, positioned at $12.93 and $14.64, have both been revisited and confirmed as support levels during this uptrend.
Accompanying the price surge, the On-Balance Volume (OBV) has exhibited a notable increase, suggesting heightened buying pressure. Although the Relative Strength Index (RSI) pointed towards an overbought status, no bearish divergence had materialized at the time of reporting. A potential scenario of consolidation within the $16-$17 range could unfold in the coming weeks before the next upward movement.
If a downward correction occurs, the zone spanning from $15.45 to $15.95 is expected to act as a strong support area for UNI’s price.
Exploring the Impact of New Addresses on Market Trends
In the past trading cycle, the Ethereum network witnessed a surge in new addresses, largely driven by the emergence of various small-cap tokens. This influx of new participants led to heightened activity on Uniswap, the prominent decentralized exchange (DEX) facilitating such trades. A similar trend is currently unfolding within the Solana [SOL] network, notably amidst the meme coin craze.
The increase in new addresses and enhanced user engagement typically results in escalated transaction fees, particularly during the final stages of a bull market cycle. When comparing the metrics from 2021 to 2024, it is apparent that the number of new addresses and network fees currently remain below the previous highs.
While these metrics suggest the potential for sustained long-term growth, other indicators hint at a probable short-term pullback. Uniswap experienced a distribution phase throughout October and early November, indicated by a decline in the average coin age.
Simultaneously, the MVRV ratio witnessed a substantial upsurge, reaching levels comparable to those observed in March, signaling increased profitability. This development implies that the token might be considerably overvalued, thereby prompting traders and investors to consider securing profits and await a potential dip before re-entering the UNI market.