- Bullish expectations for Uniswap are high for this cycle
- Network metrics are well below their 2021 highs, suggesting further growth is possible
Uniswap (UNI), at press time, appeared to exhibit strong bullish conviction. It has gained 97% since November 20, while breaking several key resistance levels along the way. Its open interest also jumped 12% in 24 hours – a sign of bullish sentiment.
Technical and on-chain metrics have revealed that Uniswap is currently on a strong upward trend. And further gains can be expected in the coming months. This, even though UNI is still 61% below its all-time high of $44.9 from May 2021.
Major lower highs retested as support
Source: UNI/USDT on TradingView
Uniswap bulls managed to surpass the $17.05 level which marked the March 2024 high. Along the way, the main lower highs of this downtrend, set at $12.93 and #14.64, were both retested as support.
The OBV has increased sharply as well as the price, to demonstrate strong demand. The RSI was in overbought territory at press time, but had yet to realize a bearish divergence. A consolidation in the $16-17 zone before the next leg could materialize in the coming weeks.
The $15.45 to $15.95 area is also likely to be a firm demand area should UNI price decline south.
New addresses have not yet started an uptrend
Source: DéfiLlama
During the previous cycle, the launch of many small-cap coins on the Ethereum network saw the creation of many new addresses trying on Uniswap, the largest decentralized exchange (DEX), to trade these tokens. A similar spectacle is currently happening, and has happened, on the Solana Network (SOL) with its memecoin frenzy.
The increase in new addresses and greater participation leads to higher fees, especially during the later stages of the bull run. Comparing 2021 to 2024, new addresses matter and network fees were lower at these peaks.
Source: Santiment
Although these indicators suggest that further long-term growth is possible, other indicators suggest that a short-term pullback is likely. Uniswap experienced a distribution phase in October and early November, characterized by a drop in the average age of coins.
Read Uniswap (UNI) Price Forecast 2024-25
Meanwhile, the MVRV ratio increased and reached its March highs, indicating increasing profitability. This revealed that the token could be severely overvalued. Therefore, traders and investors should be willing to take profits and wait for a decline to buy more UNI.
