- Bullish expectations for Uniswap are high for this cycle
- Network metrics have been well under their 2021 highs, suggesting that further growth is possible
Uniswap [UNI], at press time, seemed to exhibit strong bullish conviction. It has gained by 97% since 20 November, while also breaking several key resistance levels on the way. Its Open Interest climbed by 12% in 24 hours too – A sign of bullish sentiment.
Technical and on-chain metrics revealed that Uniswap is on a strong uptrend now. And, more gains can be expected in the coming months. This, despite UNI still being 61% below its all-time high at $44.9 from May 2021.
Key lower highs have been retested as support
Source: UNI/USDT on TradingView
Uniswap bulls succeeded in climbing past the $17.05-level that marked the March 2024 high. On the way, the key lower highs from that downtrend, set at $12.93 and #14.64, were both retested as support.
The OBV has been strongly rising as well as the price, to showcase high demand. The RSI was in overbought territory at press time, but hadn’t made a bearish divergence yet. A consolidation in the $16-$17 zone before the next leg could materialize in the coming weeks.
The $15.45-$15.95 zone is also likely to be a firm demand zone should UNI’s price see a southbound dip.
New addresses yet to begin uptrend
Source: DefiLlama
In the previous cycle, the launch of numerous small cap coins on the Ethereum network saw many new addresses created trying on Uniswap, the largest decentralized exchange (DEX), to trade these tokens. A similar sight is playing out now, and has been, on the Solana [SOL] network with its memecoin frenzy.
Rising new addresses and greater participation leads to rising fees, especially during the later stages of the bull run. Comparing 2021 to 2024, the new addresses count and the network fees were below those highs.
Source: Santiment
While those metrics suggested that further long-term growth was possible, other metrics suggested that a short-term pullback is likely. Uniswap saw a distribution phase in October and early November, characterized by the falling mean coin age.
Read Uniswap’s [UNI] Price Prediction 2024-25
Meanwhile, the MVRV ratio surged higher and hit its March highs to indicate rising profitability. This revealed that the token may be severely overvalued. Hence, traders and investors should be prepared to take profits and wait for a dip to buy more UNI.
