Uniswap (UNI) has faced a tumultuous journey in August 2023, with its price plummeting to a weekly low of $5.50. This decline has led to losses of nearly 17% for the month. Despite the bearish trend, recent on-chain data reveals an interesting development as bullish whales appear to be buying the dip. Could this influx of buying pressure be the catalyst for an early price rebound?
Whale Investors Step In
As Uniswap’s price struggles, large investors known as whales are entering the scene. Santiment data indicates a remarkable surge in Whale Transactions involving UNI. On August 12, only 3 Whale Transactions were recorded. However, the subsequent days witnessed a significant surge, with 38 and 34 Whale Transactions on August 14 and 15, respectively. This surge amounts to an over 1,000% increase in Whale Transactions within a week.
Whale Transactions represent confirmed UNI transactions exceeding $100,000. This uptick in such high-volume transactions implies that institutional investors are re-entering the Uniswap market with substantial bets.
Market Liquidity and Retail Investor Confidence
These large transactions not only provide the much-needed liquidity to the market but also have the potential to facilitate high-volume trades at favorable prices. Beyond liquidity, the presence of institutional investors can boost the confidence of retail investors. This confidence can play a pivotal role in reversing the downward trend, as retail investors may be more inclined to hold or buy UNI tokens if they see institutional players making significant investments.
Oversold Territory and Recovery Indicators
UNI’s current price hovers just below $5.60, reflecting a loss of over 16% in the first half of August. However, on-chain data suggests that UNI has entered oversold territory. The Network Value to Transaction Volume (NVT) ratio, a metric comparing market capitalization to transactional activity, has dropped by a substantial 82% from August 12 to August 16. This decline in the NVT ratio indicates that despite price drops, Uniswap’s network is still experiencing healthy transactional activity.
This scenario typically signals a bullish trend, suggesting that the ongoing transactional activity might drive a price rebound once selling pressure subsides.
UNI Price Prediction: Recovery and Consolidation
Taking into account the aforementioned on-chain indicators, it’s plausible that UNI’s price could start recovering in the near future. The green signals flashing across Uniswap’s ecosystem might provide initial support around the $5 range. The In/Out of Money Around Price (IOMAP) data, which shows current holders’ purchase price distribution, further supports this positive outlook.
Around $5.40, 9,720 addresses bought 25 million UNI tokens, potentially acting as a trigger for an early rebound. If this support doesn’t hold, a substantial buy-wall could form around $5.
On the flip side, if bullish momentum gains traction, a rebound toward $7 becomes possible. However, a pullback might occur if the price approaches $6.40, where 12,700 holders purchased 18.2 million UNI tokens.
In conclusion, the interplay between bullish whales, oversold conditions, and transactional activity indicates a potential turnaround for UNI’s price trajectory. While markets are inherently unpredictable, the current data paints a cautiously optimistic picture for Uniswap’s recovery in the coming days.