Uniswap (UNI) price extends gains by more than 1% to $5.35

The price of Uniswap (UNI) extended gains by more than 1% to reach $5.35 by 07:32 ET (11:32 GMT) on Wednesday. The uptick in UNI’s price came amid heightened whale activity, with previously dormant addresses linked to the project making significant transfers to Coinbase Prime (NASDAQ:COIN).

As reported by crypto analytics firm Spot On Chain, wallets connected to Uniswap, the second-largest decentralized exchange (DEX) by daily trading volume, transferred 19.21 million UNI, valued at approximately $102.7 million at the current exchange rate, to Coinbase Prime over the last week.

The latest transfer on Wednesday involved an address that had been dormant for nearly five years. This address deposited 9 million UNI, worth approximately $48.1 million, to the exchange.

Such large-scale transfers, especially from wallets known to be associated with a crypto project, often spark concerns among crypto traders about potential dumping. These dumps could cause significant liquidity spikes and hinder the token’s price recovery from any upcoming dips.

Uniswap has yet to comment on the reports.

Uniswap’s price recovered slightly in the early European session on Wednesday, showing an increase of more than 1% on the day.

The token’s derivatives market displayed a slightly positive outlook, with the Open Interest (OI) rising by 0.75% to reach approximately $246 million, according to data from Coinglass.

Uniswap derivatives data | Source: Coinglass

Meanwhile, the Binance long/short ratio stood at 1.7144, indicating a greater bullish sentiment among traders who are placing greater bets on a rise in Uniswap’s price. On OKX, the ratio was an even stronger 2.6. However, traders should be cautious as there was a slight 0.41% decrease in volume to $341.5 million.

Uniswap price shows potential for a 52% breakout

Since December, Uniswap’s price action in the last five months has displayed a dismal performance, as evident in the daily chart. The chart highlighted a downward trend, marked by lower highs and lows, and UNI remained below the 50-, 100-, and 200-day Exponential Moving Averages (EMAs). This structure pointed towards a stronger bearish force compared to the struggling bullish one.

However, the formation and validation of a falling wedge pattern could present a bullish outlook for UNI, setting the stage for a 52% breakout to reach $7.84. This is a bullish pattern that occurs during downtrends and is defined by two converging trendlines that slant downwards.

Uniswap broke above the upper trendline on April 20, which was also accompanied by a spike in trading volume as the bulls encountered resistance at $6.00.

After a slight testing of the 50-day EMA, which also coincided with the wedge's breakout level, and a minor rejection at $6.00, leading to a small-scale correction, the bulls now faced the task of stabilizing the gains in the early European session.

The primary focus should be on the wedge pattern's breakout potential to $7.84. A successful breakout could accelerate the bullish momentum towards the 100-day EMA at $7.35 and ultimately the 200-day EMA at $8.38.

Relative Strength Index (RSI)

The Relative Strength Index (RSI) is currently at 44, showing a slight increase from 42. However, it is still below the midline zone of 50. This suggests that while momentum is improving after the breakout and could continue as long as the 50-day EMA provides support for the price, there might be more pressure on the price to move downwards.

This downward pressure could lead to a test and collection of liquidity at the $4.50 level, which served as support in April.