Uniswap, the popular decentralized exchange protocol, could be on the verge of a significant price correction, following recent developments within the Uniswap Foundation. The foundation recently deposited 9.79 million UNI tokens, valued at approximately $4.19 million, into notable exchanges such as OKX, Falcon X, and CEXs. These moves have raised concerns among experts, who are now predicting a potential downturn for the UNI token, currently trading at $4.09.
Despite hovering around the $4.02 support level for the past six weeks, the UNI token experienced a notable setback with a 9.24% decline in value, immediately after a mid-October rally. The market’s on-chain metrics, including the increase in UNI supply on exchanges from 62.27 million to 65.35 million, underscore a growing bearish sentiment among investors.
Adding to this pessimistic outlook, there has been a 6.57% reduction in Uniswap whale wallets holding between 100,000 to 1,000,000 UNI. This decline in large holdings further signals investor apprehension.
The Relative Strength Index (RSI) provides additional evidence of potential correction, suggesting an 8% drop to $3.70 if the crucial $4.02 support level fails to hold. A further escalation in selling pressure could potentially drive the UNI token down to $3.35, translating to a substantial 17% decrease.
However, it’s important to note that the cryptocurrency market is renowned for its volatility, and rapid price fluctuations are not uncommon. If buying pressure manages to push UNI above the $4.38 threshold, it could invalidate the bearish perspective and, in turn, stimulate a 15% upswing, possibly reaching $5.04.
This scenario underscores the unpredictability of the cryptocurrency market and the necessity for investors to remain well-informed about these swift changes.
