Uniswap [$UNI] has surged over 10%, ranking just behind Aave Protocol [AAVE] among the leading decentralized finance (DeFi) platforms. The platform witnessed a notable daily trading volume increase of more than 20%, reaching approximately $521 million.
The driving forces behind this altcoin’s price movement include large-scale investments from institutions and whales, an uptick in the burn rate, and heightened network engagement.
What’s fueling Uniswap’s bullish momentum?
A previously inactive institutional wallet recently withdrew over 222,000 $UNI tokens, valued at more than $960,000, after almost eight months. This wallet has been steadily accumulating, now holding a total of 4.837 million tokens worth roughly $22 million.
All tokens were moved from the Coinbase wallet, with this position showing a rise of over 7.32% in just 24 hours at the time of reporting.
Moreover, whale investors are also actively engaging. Three whale wallets have been purchasing $UNI from Upbit, which suggests that larger Asian investors are channeling funds into the platform.
These wallets transferred over 146,000 $UNI, totaling $647,000, from Upbit’s main wallet to a more secure cold wallet. During this time, 47,563 $UNI worth over $209,000 were moved from Binance’s main wallet to Wintermute’s market-making address.
Conversely, the same three wallets sold 9.6 million POL tokens for more than $1 million, indicating a stronger belief in the $UNI project compared to Polygon.
Examining Uniswap’s burn rate
Apart from accumulation, Uniswap’s burn rate has been achieving noteworthy milestones. On August 21st, the altcoin experienced its highest daily burn in USD, registering approximately $590,000.
Breaking down the sources of these fees, Ethereum [ETH] contributed $267,000, while Base and Robinhood Chain added $165,000 and $87,000, respectively.
The same week coincidentally saw the second-highest daily burn of 150,000 $UNI tokens. Consequently, this burn rate has effectively reduced the circulating supply of the token, contributing to its upward trend.
Will $UNI maintain its position above $4.20?
Despite the altcoin’s positive trend, $UNI is encountering resistance within the $4 to $4.60 range. This comes after breaking through this zone, marking the upper boundary of its sideways movement.
The price is currently testing the 9-EMA on the 4-hour chart, indicating a potential temporary decrease in bullish momentum. Nevertheless, it remains far from the 9-EMA on the daily chart.
Additionally, the transfer activity of $UNI on Binance surged prominently, increasing from 8,570 to 24,300 transfers, signifying nearly a threefold rise in network activity.
Nonetheless, the Up/Down Volume was predominantly influenced by bears during the time of reporting. This is apparent, as bearish sentiment prevailed in the $4 to $4.60 resistance zone, with bears contributing $2.17 million compared to $1.26 million from the bulls.
This scenario could potentially lead to a correction back into the range. On the other hand, maintaining above this range would allow for an extended upward trend unless a significant support level of $3.22 is breached.
In Summary
- Uniswap has surged over 10% due to institutional and whale engagement, coupled with an increasing burn rate.
- Uniswap has surpassed the $4-$4.60 resistance zone but is facing challenges to continue its upward trajectory.