Uniswap (UNI) price is up 4% over the last 3 trading days. However, cryptocurrency investors seem unconvinced by the bullish momentum. Will the Bears force another touchdown?
Uniswap flashed a bullish price rally as the altcoin markets jumped 5% on April 26th. However, on-chain data indicates that Uniswap holders are increasingly moving tokens to exchanges. Do bears prepare a bull trap?
Uniswap holders load their exchange wallets
On-chain data shows that Uniswap investors have moved a large number of their tokens to exchanges in recent weeks. Glassnode’s Balance on Exchange metric tracks real-time balances of tokens deposited on recognized exchange wallets.
Looking at the chart below, UNI balances deposited in exchange wallets increased by 4.2 million tokens between April 2 and April 25. This represents an 11% increase in the number of tokens available for trading in the market.
Usually, when investors move assets to the exchanges, they may be looking to take profits in the short term. Thus, with investors transferring such a large amount of tokens to exchanges within a short period of time, Uniswap could see some selling pressure in the coming days.
Bears accumulate sell orders
UNI holders may be looking to build up significant selling pressure across major exchanges, according to data provided by IntoTheBlock. The Exchange Market-Depth chart provides an insight into the number of active buy and sell orders placed by investors across prominent crypto exchanges.
The exchange market depth chart below shows how high active sell orders are above the current order. Specifically, the bears placed sell orders for 3.4 million UNI tokens. Meanwhile, buyers have requested just 2.7 million tokens around current prices.
This dearth of demand could culminate in downward pressure on UNI price over the coming days. This is because when the supply of an asset exceeds the demand, the market momentarily saturates.
Unless Uniswap can generate significant traction in the coming days, many UNI holders may want to lower their prices to fill their limited orders.
UNI Price Prediction: The resistance at $5.9 is unlikely to be overcome
IntoTheBlock’s global In/Out of The Money data shows that UNI price should hold the $5.32 support to prevent a bearish reversal. However, panic selling from 13,000 holders who bought 9.4 million tokens around this price level could lead to a pullback.
And if Uniswap loses this support, holders can expect a sharp decline towards $4.7. Around that area, a collection of 30,000 addresses containing 18 million tokens can provide massive support.
However, the bulls could invalidate the bearish outlook if UNI manages to break above $5.90. Although, as noted above, resistance from 36,000 addresses containing 61 million UNI tokens could hinder the rise. But if the bulls can break this resistance, Uniswap price could rise to $6.50.
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.