Uniswap (UNI) remained under sustained selling pressure on Thursday, marking its third consecutive daily decline as bears intensified efforts to force a bearish breakout from an 18-day consolidation range. The ongoing weakness reflects not only technical pressure but also a broader deterioration in on-chain fundamentals and derivatives market sentiment.
Data shows that Total Value Locked (TVL) and weekly trading fees on Uniswap have declined sharply in recent months, signaling cooling user demand. At the same time, falling open interest in UNI futures suggests traders are reducing exposure and risk appetite, reinforcing the cautious market tone.
📊 Declining User Demand and Bearish Signals from Derivatives Markets
Uniswap has experienced a steady drop in user engagement since early October, clearly reflected in both TVL and protocol revenue metrics. According to data from DeFiLlama, Uniswap’s TVL has gradually fallen to approximately $4.22 billion this week, down significantly from $5.94 billion recorded in early October.
This consistent decline indicates a sustained outflow of capital from the protocol, highlighting growing user caution amid broader market uncertainty.
Weekly trading fees paint a similar picture. Uniswap currently generates around $5.32 million in weekly fees, a steep decline from nearly $39.53 million during the first week of October. Such a sharp contraction in activity underscores reduced liquidity usage and may weigh on investor confidence in UNI’s near-term prospects.
In derivatives markets, data from CoinGlass shows UNI futures open interest fell 4.36% over the past 24 hours to $402.72 million, signaling that traders are actively closing positions or reducing leverage. While the funding rate has rebounded slightly to around 0.0010% after briefly dipping into negative territory, this recovery remains insufficient to shift overall sentiment. Traders appear reluctant to pay premiums to maintain long exposure, reinforcing the prevailing bearish bias.
⚠️ Technical Structure Signals Rising Downside Risk
At the time of writing, UNI is trading nearly 3% lower, having decisively broken below the December 24 support at $5.59. A sustained close below this level would confirm a bearish breakdown from the 18-day consolidation range, whose upper boundary aligns with the December 21 high near $6.50.
If downside follow-through materializes, UNI could extend losses toward the psychological $5.00 level, followed by a potential retest of the December 18 low at $4.84.
Momentum indicators on the daily timeframe continue to favor sellers:
RSI (14) stands around 44, slipping below the neutral midpoint and trending toward oversold territory, signaling increasing downside pressure.
MACD has completed a bearish crossover below its signal line, confirming that negative momentum is reasserting itself.
These combined signals suggest that bearish momentum remains dominant unless UNI can quickly reclaim lost support.
On the bullish side, if UNI manages to hold above $5.59, a short-term technical rebound cannot be ruled out. Such a move could allow price to remain range-bound and potentially re-test the key resistance zone near $6.50.
🎯 Educational Trade Scenarios (Not Investment Advice)
🔴 Sell / Short Scenario (Breakdown Confirmation)
Sell Entry: Daily close below $5.55
Take Profit 1: $5.00
Take Profit 2: $4.84
Stop Loss: $5.95
➡ Scenario favors continuation if bearish momentum and volume expansion confirm the breakdown.
🔵 Buy Scenario (Support Hold & Rebound)
Buy Entry: Strong bullish reaction and close above $5.60
Take Profit 1: $6.20
Take Profit 2: $6.50
Stop Loss: $5.20
➡ Valid only if price holds support and momentum indicators stabilize.
🔍 Final Thoughts
Uniswap currently sits at a critical technical and fundamental crossroads. Weakening on-chain activity, declining protocol revenue, and reduced derivatives participation all point to a cautious market environment. While a short-term rebound remains possible if key support holds, the broader bias remains tilted to the downside unless demand and capital flows show clear signs of recovery.
⚠️ Disclaimer
This article is provided for informational and educational purposes only and reflects a personal market analysis. It does not constitute financial or investment advice. Cryptocurrency markets are highly volatile. Always conduct your own research and manage risk responsibly. The author bears no responsibility for any investment decisions.
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