An analyst has examined various on-chain indicators to suggest that Uniswap (UNI) might be primed for a price breakout.
Promising Uniswap Metrics Hint at a Rally
In a recent post on X, analyst Ali has discussed potential outcomes for UNI based on underlying metrics. One key indicator here is the number of addresses holding UNI tokens with a net unrealized loss.
Here is a chart illustrating the trend in this Uniswap metric over the past few years:
From the graph, we can see that there are currently around 308,910 Uniswap addresses or investors in a loss position. This accounts for about 87.56% of the cryptocurrency’s total user base.
Generally, when a high number of investors are in profit, there is a greater likelihood of a selloff as holders take the opportunity to realize their gains. Conversely, a large number of holders in a loss position might signal an exhaustion of sellers in the market.
Given the significant number of Uniswap addresses currently experiencing losses, it is possible that selling pressure has already subsided. Consequently, the asset may be unlikely to decline, at least in the near term.
While the overall market sentiment appears bearish, Ali notes an increase in the number of large UNI transactions.
These “large transactions” refer to transfers valued at least $100,000, which are usually conducted by whales or institutional entities. The frequency of such transfers can provide insights into the level of activity by these large holders.
The sudden increase in the number of large transfers may indicate a growing interest in UNI at its current price level. According to the analyst, these investors may be positioning themselves before Uniswap experiences a breakout.
Ali also highlights a strong on-chain support wall beneath the current UNI prices.
In on-chain analysis, support and resistance levels are determined based on the number of addresses/investors that bought at those levels. As depicted in the chart, there is a concentration of holders just below the current UNI prices, suggesting that if the asset were to retest those levels, it could encounter buying pressure.
“Even though Uniswap established a key support floor at $4, there are two supply walls it needs to overcome to signal a bullish breakout,” explains Ali. “One is at $4.23, where 7,000 addresses bought 14.24 million UNI, and the other is at $4.45, where 2,000 addresses hold 10.28 million UNI.”
UNI Price
Uniswap has been range-bound around the $4 level for an extended period, without managing to sustain upward momentum.
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