After double-digit gains in the second half of June, Uniswap (UNI) price fell to $5.3 this week after failed attempts to retake the $6 region. On-chain data indicates that UNI’s price hike is beginning to subside as the SEC FUD surrounding centralized exchanges fades.
The price of UNI soared 30% in June as investors turned to Uniswap and other high-profile DEXs following a lawsuit by the Securities and Exchange Commission (SEC) against Binance and Coinbase.
However, Coinbase shares are up 50% after one month. Binance’s BNB coin rebounded 10% to regain $250, while regulated CEXs such as Kraken and Bitstamp also saw significant volume growth.
How might the return of these centralized exchanges affect UNI prices in the coming weeks?
The downward trend in trading volume with Uniswap raises concerns
On-chain data shows that the re-emergence of centralized exchanges has gradually dismantled some of Uniswap’s traction. According to data from the blockchain analytics platform tieUniswap user activity and transaction volume fell significantly in July.
The graph below shows that UNI attracted 935 active users on July 1st. But that number is now down to 632 active addresses by the end of July 11th.
Uniswap’s transaction volume on July 11 was down 14% from its 30-day average.
active addresses Evaluates user activity by calculating the daily number of wallet addresses that carry out transactions. When it falls, as we saw above, it highlights a decline in the number of users who use the basic services offered by the network.
Not surprisingly, transactions involving UNI have also now fallen below the 30-day average. If this downward trend of declining market participation continues, UNI holders can expect a further decline.
Investors who lag behind UNI could accumulate more downside pressure
One of the most important mechanisms of Uniswap’s interest and price stability is the passive income provided to investors who participate in UNI’s liquidity smart contracts. However, the data was compiled on-series by glass It shows that investors have not been content with their UNI tokens over the past two weeks.
The chart below shows how Uniswap investors mined 116,000 UNI tokens (0.02% of the total circulating supply) between June 28 and July 12.
the Supply in the smart contract metric tracks real-time changes in the percentage of supply of currently deposited circulating tokens across various staking protocols.
When it falls, it immediately increases the number of tokens available for trading in the markets.
If the 116,000 recently unsold tokens hit the market amid an ongoing downward trend in demand, the price of UNI could drop further in the coming days.
UNI Price Prediction: The bears are eyeing the $4.50 area
The above factors suggest that the Uniswap bears may be eyeing a reversal towards the $4.50 region.
But first, they will have to overcome the $5.20 resistance. In that region, 11,000 investors who bought 27 million UNI tokens at an average price of $5.24 could prevent the decline.
But if the bears gain a foothold as expected, UNI price could drop to $4.50.
However, the bulls could invalidate the bearish prediction if UNI price breaks above $6. However, the resistance at $5.80 could prove challenging again.
As we saw above, 12,000 investors bought 18 million UNI tokens at an average price of $5.77. If they choose to lock in profits, Uniswap could fall back once it gets close to that price range.
However, if the resistance level does not hold, UNI could reach the $6 target.
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.