Uniswap (UNI) has reached a significant milestone, surpassing $38 billion in monthly volume across Ethereum Layer-2 networks like Base, Arbitrum, Polygon, and Optimism. This surge in trading activity has contributed to a positive sentiment in the market, with UNI currently testing the crucial $13 resistance level. At press time, UNI was trading at $12.95, marking a 2.16% gain over the last 24 hours. The key question now is whether UNI can break through this resistance and continue its upward trajectory, or if it will face a pullback in the near future.

On-Chain Data: Bullish Signals for UNI

Uniswap’s on-chain data presents a number of bullish indicators, suggesting continued momentum for UNI. Net network growth has increased by 0.34%, showing that more users are adopting the platform. Additionally, into-the-money transactions have risen by 1.56%, signaling that a growing number of investors are in profitable positions. A modest 0.04% increase in concentration suggests that holders are becoming more confident in their positions.

The most significant bullish sign, however, is the sharp rise in large transactions, which spiked by 6.92%. This increase highlights growing institutional interest and the involvement of large traders, suggesting that big players are positioning themselves for potential price appreciation in UNI. This shift in the investor base could play a pivotal role in pushing UNI’s price higher in the coming weeks.

Price Action and Technical Analysis

As UNI tests the $13 resistance level, its price action remains at a critical juncture. A breakout above this level could propel the price to $17, the next major resistance point. However, with the Relative Strength Index (RSI) reading 71.56, UNI is nearing overbought conditions. While the bullish trend remains intact, investors should be cautious of a potential pullback or period of consolidation before any significant breakout occurs.

Mixed Signals from Exchange Reserves and Liquidations

The exchange reserves of UNI have seen a slight increase of 0.12% in the last 24 hours, bringing the total number of UNI tokens held on exchanges to 68 million. This suggests that some investors may be holding onto their tokens in anticipation of further price gains, while others might be preparing to sell depending on their market outlook.

At the same time, the liquidation data shows a higher concentration of long positions, with $334.85k in long liquidations compared to only $71.35k in short liquidations. This imbalance indicates that most traders are betting on continued bullish momentum, leaving UNI vulnerable to a potential short squeeze if the market moves against them.

Will UNI Continue Its Upward Trend?

Uniswap’s impressive volume surge, combined with strong on-chain indicators and an increase in large transactions, suggests that the bullish outlook for UNI could continue. However, the RSI nearing overbought levels and the mixed signals from exchange reserves imply that caution is warranted. A successful breakout above the $13 resistance could drive UNI to higher levels, but there is a risk of a pullback or consolidation first. As the market remains volatile, investors should carefully monitor UNI’s price action and be prepared for possible fluctuations.

In conclusion, Uniswap’s performance is showing strong bullish potential, but the risk of short-term pullbacks remains. If UNI can break past $13 and maintain momentum, further gains may be in store for the token in the near future.