Sitting at $5.80, the Uniswap (UNI) price is now up over 50% since it rebounded from its recent local bottom of $3.63 on June 10. While bullish investors look to push for a new 2023 price peak, critical UNI on-chain warning signs have emerged.
On July 20, fear gripped the Uniswap ecosystem after an attacker seized control of Founder Hayden Adams’ Twitter account. The attacker then attempted to scam his followers through a malicious link posted on the page.
The hack was quickly botched before any major damage was done. However, the event has now exacerbated warning signs that could derail the ongoing UNI price rally.
Investors are Loading Up Their Exchange Wallets as Warning Signs Grow
This week, Uniswap investors have been moving their tokens into exchange wallets. This can be attributed to growing fears that hackers could have obtained critical information to conduct a more malicious attack after compromising the Founder’s Twitter account.
According to data compiled by Glassnode, UNI tokens deposited in exchange wallets climbed from 44.5 million to 44.8 million between July 21 and July 26. This represents an increase of 285,000 tokens in exchange reserves.
Balance on Exchanges tracks the daily changes in the number of tokens investors have deposited in exchange wallets. Often regarded as the crypto-equivalent of a checking account, investors could be looking to spend their tokens in the short term when exchange reserves increase.
Hence, strategic investors could interpret this sharp rise in market supply across crypto exchanges as early warning signs of a potential Uniswap price correction.
Despite Recent Price Gains, Whale Investors are Reducing their Trading Activity
In further confirmation of the cautious UNI price outlook, whale investors have cut down on their trading activity this week.
IntoTheBlock’s chart below illustrates how the UNI Whale Transactions (blue line) plummeted by 78% between July 18 and July 25. In nominal terms, the whales conducted 126 transactions on July 18. But at the close of July 25, there were only 27 Large transactions involving UNI.
Confirmed transactions that exceed $100,000 in value are regarded as Whale Transactions. When such transactions decrease, whale investors are tuning down their trading activity.
Due to their financial power, a drop-off in whales’ trading activity could gradually reduce the liquidity available to fulfill trades. Hence, this further validates those mentioned above on-chain Uniswap warning signs.
UNI Price Prediction: $5.40 Level is Critical
The early Uniswap warning signs highlighted above mean that a drop below $5.40 could catalyze a prolonged UNI price correction.
However, 22,280 addresses had bought 42.27 million UNI tokens at an average price of $5.37 in that territory. They could trigger an early UNI price rebound if they accumulate more tokens to cover their long positions.
But if these warning signs crystalize into a full-blown bearish trend, UNI could drop below $5.
On the other hand, the bulls can ignore the Uniswap warning signs and push for a rally toward $7.50.
However, the 29,000 investors that bought 37.62 million UNI tokens for the maximum price of $6.57 could stop the rally.
Nevertheless, if they can push that resistance aside, UNI could reach a new 2023 peak of $7.50
Read More: 11 Best Crypto Portfolio Trackers in 2023
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