- Uniswap price hints at pullback as the TD Sequential indicator flashed a sell signal on the weekly chart.
- UNI network saw a reduction in new users joining the network, further supporting the bearish thesis.
- The reversal in Uniswap’s momentum could extend if the support barrier at $20 is breached.
Uniswap price witnessed a remarkable 580% upswing in roughly 46 days. However, this parabolic rally could be reversing soon due to multiple sell signals being flashed on both the technical and the on-chain metrics.
Uniswap price witnesses a decline in momentum
On the weekly chart, Uniswap price shows almost every candle closed at least 30% higher than its open since December 28. However, the previous weekly candle noted only a 5.7% surge, which suggested a slowdown in UNI’s momentum. Rightfully so, what followed next is the sell-signal from the TD Sequential indicator in the form of a green nine weekly candlestick.
This technical setup forecasts a correction that ranges anywhere between one to four weekly candlesticks.
UNIUSDT weekly chart
Adding to UNI’s bearish woes is the reduction in the number of new users joining the Uniswap network. This metric stands at 3,500 today, which is a 41% decline in new addresses since January 31. This drop-off indicates an exodus of investors who are either booking profits or reallocating their capital.
Uniswap new addresses chart
As per IntoTheBlock’s Global In/Out of the Money (IOMAP) model, the support barrier at $20 is the only thing holding Uniswap price from a steep crash. Here, roughly 19,300 addresses purchased nearly 33 million UNI.
In the event of a sharp sell-off leading to this support’s failure, Uniswap price will pullback to the next immediate support at $15, where approximately 12,000 addresses purchased about 26.5 million UNI.
Uniswap IOMAP chart
However, if the selling pressure fails to slice through the support level at $20, then investors can expect a bounce. This bearish thesis will be invalidated if UNI closes above the recent high at $23.8.
Share
