Uniswap’s native token, UNI, has recently been facing downward pressure, with technical indicators showing a potential price decline ahead of the much-anticipated v4 upgrade. While UNI has consistently dropped in value over the past few weeks, some traders are wondering if this trend will continue or reverse as the platform prepares for an infrastructure overhaul.
UNI’s recent price action has shown signs of weakness, with the token failing to hold a critical support level. For the past three months, the $12.50 mark had acted as a solid support level for UNI, with the token bouncing back multiple times when it neared that price. However, a recent breakdown below this support has triggered a bearish sentiment among investors. This failure to hold the $12.50 level suggests that UNI could see further downside in the short term.
According to technical analysts, the token may experience a decline of up to 20%, potentially reaching the psychological support level of $9.50. This level could act as a key point where price action might stabilize, but traders should be cautious as momentum remains largely negative.
Despite the recent bearish outlook, UNI is still trading above the 200 Exponential Moving Average (EMA) on the daily timeframe. The 200 EMA is often considered a long-term trend indicator, and its position above the price suggests that UNI is still in an overall uptrend, even though it has struggled in recent weeks.
This could signal that the token has not completely entered a downtrend yet, leaving room for potential recovery should market sentiment shift or the upcoming v4 upgrade generate positive interest.
The on-chain data provides additional insights into the current market dynamics for UNI. Recent reports from on-chain analytics firm Coinglass revealed that exchanges saw significant UNI inflows, amounting to $10.20 million within the last 24 hours. This suggests that investors, particularly long-term holders, may be moving their UNI tokens onto exchanges to liquidate their positions amid the bearish price action.
This increase in inflows could contribute to heightened selling pressure, potentially pushing the price even lower in the coming days. If this trend continues, UNI could face even more significant drops before stabilizing.
Interestingly, Uniswap’s upcoming v4 upgrade could play a crucial role in shaping the token’s future price action. Scheduled for release next week, the v4 upgrade promises to enhance Uniswap’s infrastructure, including improvements to liquidity provision and support for hooks and integrations. This could provide a more robust foundation for Uniswap, potentially boosting market confidence and, in turn, the price of UNI.
Despite the promising upgrade, the market sentiment around UNI is currently muted, with the bearish price patterns and recent outflows overshadowing the potential benefits of the v4 rollout.
Uniswap’s UNI token is currently at a crossroads, with bearish technical indicators suggesting a 20% decline could be in the cards. However, the upcoming v4 upgrade might serve as a catalyst for renewed optimism if it can deliver on its promises. Traders should remain cautious, monitoring both technical patterns and the broader market reaction to Uniswap’s infrastructure update.
As always, those holding UNI or looking to enter the market should keep a close eye on the price action around key levels, especially the $9.50 support zone, and watch for any signs of reversal post-upgrade.
Pankaj is a skilled engineer with a passion for cryptocurrencies and blockchain technology. With over five years of experience in digital marketing, Pankaj is also an avid investor and trader in the crypto sphere. As a devoted fan of the Klever ecosystem, he strongly advocates for its innovative solutions and user-friendly wallet, while continuing to appreciate the Cardano project. Like my work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9
Get the latest Crypto & Blockchain News in your inbox.
Join Now