Uniswap [UNI] has been under significant selling pressure in recent days, as CryptoCrypto has highlighted the possibility of a 30% price decline.
Interestingly, Uniswap’s deployment on Celo has witnessed a surge in trading volumes amidst the bearish sentiment in the market, indicating a divergence between market mood and adoption patterns.
The price of Uniswap has been steadily decreasing, reaching $6.6 on November 4, hitting its lowest point since October and experiencing a 60% drop from its peak this year.
The anticipation surrounding the U.S. elections has added to the market’s volatility, leading traders to search for stronger support levels for stability.
Uniswap Breaks Below Bearish Pennant
Technical analysis suggests further downward movement for Uniswap after breaking below a bearish pennant structure in the daily chart.
The crucial support level at $4.68 corresponds with the expected target from the pennant formation, acting as a bottom for the current sell-off.
The Stochastic RSI in oversold territory below 20 indicates a firmly established bearish momentum, hinting at potential further declines before any chance of a reversal.
The dip below both the 200-day and 50-day Exponential Moving Averages (EMA) introduces the possibility of a death cross formation, a signal of prolonged bearish trends.
A similar pattern was observed on July 25, resulting in a subsequent 40% decline after its appearance. The recent breach of key moving averages intensifies the pessimistic outlook.
Despite the drop in price, trading on Uniswap’s Celo platform has seen significant growth, with volumes increasing by about 20 times since January 2024.
Weekly trading on Celo has surged from $10 million to nearly $350 million, underlining Uniswap’s prominence in the decentralized finance (DeFi) sector.
Consistent Growth in On-Chain Metrics
Analysis of addresses has shown a steady rise in long-term holders, with over 360,000 addresses holding Uniswap for more than a year.
This increase in long-term holders points to a core group of steadfast investors, providing a level of stability amidst the current sell-off trend.
On the other hand, mid-term holders, holding UNI for one to twelve months, have stabilized around 120,000 addresses after peaking in early 2021.
Short-term traders, who usually hold for less than a month, constitute a smaller group, suggesting waning speculative interest as the market matures.
Discrepancy in UNI Funding Rates Indicate…
Positive funding rates, depicted in green, showcase periods dominated by long positions, highlighting bullish sentiment.
Conversely, intermittent red drops below the neutral line indicate phases of negative funding, signaling bearish pressure. Despite predominantly positive funding rates since late October, UNI’s price trend displays a consistent decline.
This mismatch between funding rates and price evolution indicates investor hesitancy as the price continues on a downward trajectory, potentially exerting mounting pressure on long positions as the market corrects.