UNI price has seen huge volatility throughout the past few days and weeks, with strong buying pressure post-launch propelling it to $ 8.5 before witnessing a massive influx of selling pressure. This selling pressure has driven its price below $ 5 even though it is still trading significantly higher than the recent low of $ 1 established shortly after its introduction.
Analysts are now noting that the combination of increased selling pressure and the rate of active funding for UNI perpetual swaps suggests that a downside is probable in the short term.
UNI price plunges below $ 5.00 as market consolidation shows weakness
Not so long ago, the UNI price is down more than 20% at $ 4.95. Uniswap (UNI) has been struggling to gain momentum since it climbed to a high of $ 8.5 earlier this week.
UNI/BTC 4-hour chart | Source: TradingView
Although currently below the weekly high, it’s important to note that it is still trading up from its post-launch low of $ 1, which comes shortly after the token was listed on Uniswap.
This drop happened due to the sudden outflow of 400 UNI sell orders seen shortly after its listing, during which time Airdrop token recipients were frantically selling their tokens.
While talking about the cryptocurrency’s short-term outlook, analyst Chase_NL observed that although UNI is entering a large support zone, the intensity of the selling pressure of Bitcoin and Ethereum could pull UNI lower.
He stated:
“UNI update: Had some bids fill in the gray box, but I’m simply exiting them here in small profits. There’s a potential (not saying it will happen), but there’s a potential for ETH and BTC to continue downwards, and I doubt UNI will hold if so.”
Altcoins such as Uniswap’s governance token is currently showing total weakness, a trend that will likely last until Bitcoin and Ethereum find stability.
Read more:
- Cream Finance (CREAM) Will Burn 67.5% Of The Token Supply, Sept 20th
- UniSwap Is Now The Leading DeFi Protocol In Terms Of Total Value Locked Meanwhile UNI Price Has Surged Over 600%