After prolonged struggles near a crucial support level, UNI, the native token of Uniswap, a top-tier decentralized exchange, has failed to maintain that level and is now poised for a price drop. This notable breakdown of support comes as the overall market begins to experience a price decline.
However, given the current market sentiment and the recent support breakdown, investors and long-term holders have been offloading their UNI holdings, according to the on-chain analytics firm Coinglass. Data shows that exchanges have recorded an inflow of $5 million worth of UNI in the past 24 hours.
In the cryptocurrency landscape, inflow refers to the movement of assets from wallets to exchanges, potentially indicating dumping. Such inflows to exchanges can lead to price declines and increased selling pressure.
According to expert technical analysis, UNI has broken below its crucial support level of $12.5, which has been tested more than four times in the past three months. However, on previous occasions when the price reached this support level, UNI experienced buying pressure and upward momentum.
Since breaking the support level, the sentiment has shifted toward a downtrend. Based on recent price action and historical momentum, there is a strong possibility that UNI could drop by 22% to reach its next support level at $9.55.
However, the asset is still trading above the 200 Exponential Moving Average (EMA) on the daily time frame, suggesting that it remains in an uptrend.
When combining all these on-chain metrics with technical analysis, it appears that the bears have begun to dominate, and the price could soon drop to its next support level.
UNI is currently trading near $12.15 and has experienced a price drop of over 7.90% in the past 24 hours. During the same period, traders’ and investors’ participation has declined, leading to a 29% drop in trading volume.
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