Following the recent stock market crash and a weakened structure, Uniswap (UNI) fell to its lowest level in two years. The altcoin fell to $4.1, a level last seen in November 2023, before experiencing a modest rebound.
At press time, UNI was trading at $4.15, down 1.14% on the daily charts, reflecting increased volatility.
Uniswap whale dumps 2.49 million UNI
After UNI experienced a massive crisis, a long-time holder panicked and got rid of his entire UNI holdings. According to Arkham data, a sleeping whale returned after five years and dumped 2.49 million UNI for $10.62 million.
Source: Arkham
This whale sold these tokens after holding them for five years, having purchased them in the early days of Uniswap. With this sale, the whale made a profit of $1.72 million, an increase of only 19% in five years.
Usually, when whales sell during a market downturn, it signals a lack of confidence in the market and a fear of further losses.
Selling pressure is skyrocketing!
In addition to the noted whale selling activity, Uniswap experienced a massive sell-off from other market participants on January 30.
According to CryptoQuant, Exchange Inflow hit a two-month high of 4.2 million UNI and then declined significantly at the time of writing. At the same time, the altcoin saw 1.7 million exchange outflows.
Source: CryptoQuant
With FX flows soaring, the FX supply ratio climbed to a two-month high of 0.09. Often, a rising supply ratio suggested increased distribution, which further increased the risk of dumping.
Source: CryptoQuant
Historically, these market conditions have led to a reduction in scarcity, thereby further accelerating downward pressure, often a prelude to falling prices.
Is $4 Support Under Threat?
Uniswap fell significantly as investors, both individuals and traders, panicked and sold, further accelerating the downward trend.
As a result, the altcoin’s relative strength index (RSI) fell deeper into oversold territory, reaching a low of 27 at press time.
When the RSI drops to such extreme levels, it signals the dominance of sellers in the market. At the same time, Uniswap’s Relative Vigor Index (RVGI) fell to -0.12, after making a bearish cross.
Source: TradingView
The RSI and RVGI dropping to such extreme lows suggests strong downward momentum with sellers dominating the market.
Often, such market conditions signal downside risk and the possibility of its persistence. Therefore, if sellers continue to sell, UNI could break through the $4 support level and fall as low as $3.8.
However, if holders take advantage of this opportunity to buy at a discount, Uniswap could hold over $4 and recoup $4.8 in the event of a significant reversal.
Final Thoughts
- Uniswap fell to a 2-year low of $4.11 before rebounding slightly to $4.19 at press time.
- A UNI whale awoke after five years of dormancy and released 2.49 million UNI for $10.62 million.
