Uniswap (UNI) has experienced a remarkable surge in accumulation recently, signaling that it could be poised for a potential rally. The first week of February saw over $54 million worth of UNI tokens withdrawn from exchanges, a clear indication of increasing investor interest. Notably, on February 4th, there was a record daily accumulation of $25.16 million, marking one of the highest buying sprees since 2021, according to blockchain analytics firm IntoTheBlock.

Major Withdrawals and Growing Demand

The significant withdrawals of UNI tokens from exchanges show a growing trend of long-term accumulation, especially after a recent de-leveraging event allowed investors to purchase UNI tokens below $7. More than $54.6 million worth of UNI was withdrawn from several crypto exchanges during the first week of February, suggesting that investors are moving their tokens into private wallets in anticipation of a price increase.

Whale Activity and Short-Term Price Movements

While long-term accumulation is driving the token’s demand, short-term price movements depend on whale activity. The Whale vs. Retail Delta metric from Hyblock has been fluctuating between green (whale dominance) and red (retail dominance). A consistent green reading would suggest that whale traders are taking control of the market, which could indicate an upcoming price rally.

UNI’s price has stabilized above $8, showing resilience despite recent volatility. This price stability after a pullback suggests that while a major rally has not yet occurred, the foundation is being laid for potential price growth if whale activity continues to rise.

Uniswap V4: Can it Push the Price Further?

In addition to the increase in accumulation, there have been advancements to improve Uniswap’s platform, such as enhancements in capital efficiency and token swapping across multiple chains. These improvements could lead to even higher trading volumes and funds being locked within the platform.

However, some analysts, including those from Coinbase, have expressed that it might take time for these upgrades to gain significant traction in the market. They believe it could take several months for these improvements to show substantial impact. Despite initial gains in locked funds, analysts caution that full adoption and a shift in trading behavior could take longer than expected.

Price Action and Outlook

At present, UNI is down about 54% from its December high of $19. Despite this, the recent price pullback has brought UNI down to a critical support level of $7.50. This level previously acted as a breakout point that triggered rallies in March and November of 2024. If UNI manages to hold above this support level, it could set the stage for a potential rally to higher price targets ranging from $15 to $20.

The outlook for UNI is influenced by long-term investor accumulation, whale activity, and ongoing improvements within the platform. If these factors align, UNI could experience upward movement in the coming months. However, given the fluctuating activity in the market and the current market sentiment, investors should monitor these trends carefully.

Conclusion

Uniswap has seen an impressive increase in accumulation, particularly from long-term investors. Whale activity is also signaling potential shifts in the market, and with improvements in the platform, UNI could be on track for a rally. However, with market conditions still fluctuating, investors should proceed cautiously while keeping an eye on these key factors that could drive future price movements. The next steps for UNI will depend on how these elements develop in the coming weeks.