Uniswap (UNI), one of the most popular decentralized exchange tokens, is approaching a critical support level at $3, a price point that has held up since December 2020. This level has proven to be an essential support zone, fueling bullish reversals in the past. As UNI nears this threshold, traders are closely watching to see if history will repeat itself or if the price will break lower.

The Importance of the $3 Support Level

The $3 support level has been a key price point for UNI for several years. Each time UNI has touched this zone, it has fueled a recovery. Notable rebounds occurred in mid-2022, late 2023, and again in Q4 of 2024. These rallies demonstrate how crucial the $3 level has been in keeping the price from falling further.

As UNI approaches this support zone once again, many are wondering if the price will bounce back or if we’re on the brink of a bearish trend. Given the historical performance, some investors are optimistic that UNI might hold this level and reverse course, but the technical indicators suggest caution.

Bearish MACD Indicator: Potential for Further Decline

While UNI’s history at the $3 level shows potential for a recovery, technical indicators are not as bullish. The MACD (Moving Average Convergence Divergence) is currently signaling a bearish trend. The MACD line sits at -0.596, below the signal line of -0.503, and the histogram is at -0.093. This suggests that UNI could face further downward pressure before any potential recovery.

When the MACD line is below the signal line, it typically indicates that the asset is in a bearish phase, and UNI may continue to decline toward the $3 support level. However, a narrowing of the histogram could signal that the selling momentum is slowing, which could pave the way for a rebound if UNI touches $3.

Smart Money Accumulating UNI

Despite the bearish technical signals, there’s an encouraging trend in the accumulation of UNI by smart money—sophisticated investors who are often ahead of market trends. Recent data shows that UNI has experienced a net buy volume of $64.9K, with no sell volume recorded. This accumulation suggests that institutional investors and high-level traders are optimistic about UNI’s future price potential.

The average buy price for UNI among these investors is $6.50, which further reinforces the notion that these smart money players believe UNI is undervalued at its current price. Their activity could be an early sign of a potential bullish reversal if UNI holds the $3 level.

Whale Activity and Ownership Trends

Large holders, or whales, are also showing interest in UNI. Over the last 30 days, whale ownership has increased by +2.15%, indicating that significant investors are adding to their positions. This accumulation could create upward pressure on UNI’s price, especially if sustained.

On the other hand, retail investors have been showing mixed sentiment. While some have taken profits, reflecting a -4.06% change in investor ownership, retail investors have increased their holdings by +1.71%, suggesting moderate accumulation. This shift in ownership dynamics is something to watch closely as it could impact UNI’s price direction.

Can UNI Hold the $3 Support?

Uniswap’s price is currently testing a critical support level at $3. Historical price action suggests that UNI could bounce back if it holds this level, but the bearish MACD signals indicate that further decline is possible. The accumulation by smart money and whales is encouraging, but the market’s overall sentiment remains mixed.

For traders and investors, monitoring the price action around $3 will be essential. If UNI can hold this level, a bullish reversal could be in the cards. However, if the price breaks below $3, it could signal the start of a prolonged downtrend.

In the coming days, the price movement of UNI will likely determine its near-term trajectory. Investors should proceed with caution, keeping a close eye on both technical indicators and market sentiment.