Whales absorb Uniswap supply, but UNI’s price refuses to follow

After Uniswap [UNI] attempted a breakout a week ago, the altcoin faced rejection at $5.8. Since then, UNI has traded within a descending channel, with the recent broader market crash exacerbating the downside. 

As of this writing, Uniswap traded at $4.92, down 1.29% on the daily charts, extending a week-long downtrend. Now, investors, especially whales, have taken the opportunity to buy the dip. 

A Uniswap whale returns to buy the dip

After UNI touched $5.8, whales began taking profits, pushing the whale momentum to a high of 6.2. This increased whale volume on the sell side weakened upside momentum, and UNI failed to record any further gains.

The whale momentum index dropped from a high of 6.2 to 5.6, resulting in at least 4.46% in negative impact on price action. 

 As a result, prices drifted lower, suggesting that as whales exited, remaining buyers lacked enough strength to push prices higher. 

Amid this market shift driven by whale behavior, the on-chain monitor identified a whale. According to Lookonchain, as the market started to drop, a whale panicked and sold 798,734 UNI for $4.26 million at $5.33. 

Since the sale, UNI has dropped even further, reaching a low of $4.5 before slightly rebounding. However, as the decline continued, the whale took the opportunity to return to the market and buy at a discount. 

The whale bought back 757,684 UNI for $3.66 million at $4.83 each, indicating a shift in sentiment. When a whale buys during a market downturn, it signals confidence, as they anticipate a market recovery. 

Coupled with that, demand signaled recovery, as Buyer’s Strength rose to 96 while seller dominance dropped to 3.5. This marked a massive shift from the previous day, as sellers dominated, closing at 67.

Even more importantly, the altcoin’s Spot Netflow has remained negative over the past four days, signaling increased spot demand. At press time, Netflow was -$290k, a drop from -$3.13 million the previous day.

With buyers overwhelming sellers, it signaled a potential market recovery if buyers are strong enough to absorb the current market pressure.

Can the new demand lift UNI?

While whale purchases signaled a likely recovery in demand, they were insufficient to drive Uniswap toward sustained growth.

As such, the altcoin’s Relative Strength Index (RSI) rose from 32 to 35 but remained deep within bearish territory.

At the same time, the altcoin traded below its short-term moving averages, the 19- and 21-MAs, reflecting strong downward pressure.

With bearish pressure still overwhelming the market, UNI looks structurally weak to flip $5 and could drop back towards $4.5.

However, if whale demand holds and is supported by rising buyer strength, the altcoin will reclaim its MAs and target key resistance at $5.8.

Final Thoughts

• A Uniswap whale bought back 757,684 UNI for $3.66 million after panic selling 798,734 UNI for $4.26 million days earlier. 
• Uniswap [UNI] is still under strong bearish pressure, and current demand remains insufficient to lift UNI out of its slump.