Uniswap (UNI) is a decentralized trading protocol popular for facilitating automated decentralized finance (DeFi) token trading. In April, the token saw a boom in DeFi trading, driving its price to the $6.5 milestone. Despite this promising start, the UNI price has experienced a 17% decline from its local peak of $6.4 recorded on April 14. After a two-week-long downtrend, recent on-chain data suggests that UNI could be due for a price rebound.
The altcoin market contracted marginally towards the end of April, dragging down the price of Uniswap (UNI) by 17%. However, on-chain data shows that most recent UNI investors may be unwilling to assume further losses. Santiment’s Market Value to Realized Value (MVRV 30d) ratio indicates that the majority of crypto investors that bought UNI in the last 30 days are now holding unrealized losses of more than 7%.
The MVRV metric measures the valuation of a crypto asset in relation to its realized value. When the MVRV ratio is low, as seen in the case of UNI, it suggests that the market is undervalued and signals prospective investors to be on the lookout to buy. Likewise, it also indicates that the unrealized losses of current holders have now reached critical levels. To avoid booking such high losses, UNI holders will likely stop selling in the coming days. This decline in sell pressure could be enough to trigger a price rebound.
Another important factor contributing to the current bullish outlook for Uniswap is the recent increase in the number of new users joining the network. On-chain data reveals that Uniswap network growth has steadily increased over the past 10 days, growing from 183 on April 22 to 358 new joiners recorded on May 1.
Network Growth measures the number of new wallet addresses created on a blockchain network. A steady rise in network growth indicates that the Uniswap ecosystem is attracting new users, meaning demand for its core services and the underlying UNI token could increase in the coming days.
In conclusion, a bullish combination of the decline in sell-pressure from holders sitting on 7% losses and growth in demand from new entrants could power the next UNI price rebound.
UNI price prediction suggests a possible rebound above $6.0 in the short term. However, the bulls must first overcome the potential sell pressure from 9,400 investors that bought 6 million tokens at around $5.38. If the bullish scenario plays out as expected, Uniswap holders can anticipate a rally towards $6.03. In that zone, a more significant resistance from 11,500 investors holding 13.7 million tokens could pose a challenge.
Resistance around the $6.0 price could pose a problem for any further price increase as the majority of holders at $5.94 and $6.03 aim to sell their positions. If the Uniswap price drops below $5.18, bears could force a downswing. However, the 4,000 investors that bought 1.66 million tokens around that price level will likely seek to prevent the drop.
If that support level cannot hold, bears can remain in control until the UNI price declines towards $4.87. With smaller clusters of holders further down, bears could effectively push through these smaller resistance levels until $4.50.
To summarize, several factors indicate that the Uniswap (UNI) price shows promising signs of rebounding soon. The combination of a decline in sell pressure from current holders experiencing unrealized 7% losses and growing demand as new users join the network form a bullish outlook for UNI. Investors should keep an eye on the UNI price as it has the potential to rebound above $6.0, with a possible rally towards $6.03 in the short term.