Uniswap's native token, UNI, has recently experienced a volatile ride, seeing a significant rally followed by a correction and subsequent bounce. However, an examination of on-chain metrics reveals a complex picture, suggesting that while some accumulation is occurring, underlying selling pressure could challenge its upward trajectory.
UNI's Recent Performance and Critical Resistance
Earlier this month, UNI demonstrated strong bullish momentum, surging from $4.73 to $10.3 and establishing a bullish market structure on the daily timeframe. Following a predicted price dip to $6.86, the token has since recovered, bouncing by nearly 9% in the last four days. Currently, UNI faces a formidable hurdle around the $8-$8.6 range, a crucial resistance zone that could prove difficult for bulls to overcome. This zone is further complicated by the presence of "underwater" holders, who might use any rally to exit their positions at break-even, thereby adding to selling pressure.
Conflicting On-Chain Signals Emerge
On-chain data presents a mixed bag for UNI's future. On the positive side, a wallet linked to Amber Group notably accumulated 1.41 million UNI tokens, with a significant portion moved to Coinbase Prime, indicating potential long-term custody. Additionally, the number of wallets holding between 10k and 1M UNI has shown growth over the past two months. However, several other metrics paint a less optimistic picture. Around November 11, a substantial drop in "mean coin age" coupled with a jump in "age consumed" indicated a flurry of previously dormant tokens being moved, often a precursor to selling. This lack of sustained network-wide accumulation has continued, with mean coin age slowly sliding lower, suggesting investor disbelief in UNI's bullish prospects. Furthermore, the MVRV ratio has turned negative, signaling that, on average, holders are currently at a loss. High exchange inflows during mid-November and a severe downtrend in the On-Balance Volume (OBV) further underscore heavy selling pressure. Ultimately, despite a bullish daily structure, the lack of robust organic demand and persistent selling pressure from various cohorts means that sustaining a rally beyond the $8-$8.6 resistance zone will be a significant challenge for Uniswap bulls.
