Nov 30, 2024

6thTrade

Uniswap (UNI) is gaining significant traction, underpinned by a $38 billion surge in monthly trading volume across Ethereum Layer-2 networks like Base, Arbitrum, Polygon, and Optimism. Trading at $12.95 at press time—up 2.16% in the past 24 hours—UNI is at a critical resistance level of $13. The question remains: can it sustain this bullish momentum, or is a pullback on the horizon?

Strong On-Chain Signals Support UNI’s Momentum

Recent on-chain data for Uniswap has revealed a series of bullish indicators:

  1. Network Growth: A moderate 0.34% increase in network growth suggests more users are adopting Uniswap’s platform.

  2. Profitability: Transactions “in the money” rose by 1.56%, signaling that more investors are now in profit.

  3. Holder Confidence: A 0.04% rise in holder concentration points to increasing confidence among long-term holders.

  4. Large Transactions: Most notably, large transactions surged by 6.92%, indicating heightened activity from institutional investors and large-scale traders.

These metrics collectively underscore growing interest and activity, further strengthening UNI’s bullish case.

Source : Coinglass

Price Action and Resistance Levels

At press time, UNI is testing a key resistance at $13. A successful breakout above this level could pave the way for further gains, with $17 as the next major resistance zone.

However, the Relative Strength Index (RSI) is currently at 71.56, indicating that UNI is approaching overbought territory. While the upward trend remains intact, traders should be prepared for potential consolidation or a minor pullback before a definitive breakout.

Exchange Reserves and Liquidations: Mixed Signals

  • Exchange Reserves: UNI reserves increased by 0.12% over the last 24 hours, totaling 68 million tokens. This suggests some investors may be holding or preparing to sell, depending on market conditions.

  • Liquidation Data: The market is seeing a significant tilt toward long positions, with $334.85k in longs compared to $71.35k in shorts. While this reflects strong bullish sentiment, it also exposes UNI to potential short squeezes if the market shifts unexpectedly.

Outlook for UNI

Uniswap’s strong fundamentals, including robust on-chain activity and increased large transactions, support its bullish trajectory. However, with the RSI nearing overbought levels and exchange data showing mixed signals, caution is warranted.

If UNI can decisively break above the $13 resistance, further gains toward $17 are possible. However, traders should remain vigilant for signs of a pullback or consolidation in the short term.

In conclusion, while Uniswap’s outlook remains positive, prudent risk management will be key as the token navigates this pivotal resistance zone.