- UNI price is facing renewed selling pressure at the resistance trend line of the descending triangle pattern.
- Uniswap Labs and the Foundation reveal a new joint governance proposal “UNIfication” to activate the protocol for free, add a UNI write mechanism, and reduce the token supply.
- The price increase coincides with a multi-year high in whale trading and wallet creation, according to Santimento data.
UNI, the native cryptocurrency of decentralized cryptocurrency exchange Uniswap, has captured the attention of investors with a 70% jump since last week. This increase can be attributed to the recently introduced governance proposal “UNIfication”. This enables protocol fees, reduces the total supply of UNI, and establishes a usage-based write mechanism. After the announcement, Uniswap’s on-chain recorded a sudden spike in whale accumulation and wallet creation, indicating feelings of FOMO (fear of missing out).
Uniswap price soars after “unification” proposal, overview of large-scale token burn
Yesterday, UNI prices surged 42% as Uniswap’s governance and network overhaul reignited the market frenzy. A new joint governance proposal by Uniswap Labs and the Foundation, “UNIfication,” includes a plan to write 100 million tokens and direct protocol revenue to continued token writing. This update also includes new tools to enhance liquidity provider incentives across the Uniswap trading infrastructure.
As prices fluctuate, on-chain activity also spikes. High-value whale trades have peaked over the past four years, indicating that large holders are getting involved again. Along with the surge in whale activity, the number of new UNI wallet creations is also at a three-year high, likely indicating a high level of retailer participation. Analysts see the whales’ clustering and entry into retail as a sign of growing networking efforts, rather than isolated speculation.
In the derivatives market, interest rates are rising at an unprecedented rate. Open interest related to Uniswap futures has skyrocketed parabolically from $235 million to $770 million over the past four days, an increase of 227%. This rise indicates that traders are initiating new leverage exposure on UNI as Uniswap transitions to a new economic model. Historically, such spikes in open interest have fueled significant price recoveries.
A combination of protocol-level reforms, token supply adjustments, and new liquidity incentives have propelled Uniswap to position as the leading decentralized exchange platform. This change in the network’s governance structure appears to have shifted market sentiment, spurring one of the best performance weeks in recent memory for UNI, as institutional investor and retail activity volumes are both trending upward at the same time.
Also read: SharpLink Gaming earns 492 ETH in weekly staking rewards
UNI Price Signals Significant Reversal Within Bearish Triangle Pattern
Earlier today, UNI price extended its recovery from Uniswap’s recently introduced protocol-level upgrade and attempted to reach a trading value of $10.03, a level last reached in mid-September. However, the token price once again experienced selling pressure at this psychological level, resulting in a long red candlestick with an 11% loss.
A deeper analysis of the technical chart shows that the reversal is located at the resistance trend line of a long-term downtrend pattern. The chart setup is characterized by solid horizontal support at $4.84 and a downtrend line acting as dynamic resistance.
Historically, a reversal from the pattern’s resistance trendline has built up enough selling pressure to push the price towards the bottom trendline, indicating that UNI price is facing a 42% correction going forward. However, optimism around unification could stop any potential decline at $8 or $7.2. The slopes of the 50-day and 200-day exponential moving averages are hovering close to the levels mentioned above, creating additional support for buyers to stabilize volatility after the recent news-driven rally.
If buyers continue to hold this level, Uniswap could rebound and challenge the pattern’s resistance trend line again.
Conversely, if the UNI price falls below the $7.2 floor, sellers may push the price up to the $5 support.
Also read: Cardano card launches, brings ADA payments to over 6 million users worldwide