As the broader crypto market crashed, Uniswap [UNI] experienced strong downside pressure. After failing to hold $10 the previous day, the downside intensified, and UNI plunged to a low of $9.02.
At press time, UNI was trading around $9.10, down 9.13% on the daily charts. Over the same period, the altcoin’s Spot Volume rose 45%, suggesting increased sell-side activity as investors reduced exposure.
Early investor moves $12.9M in UNI
According to Nazoku, an early Uniswap investor sent $12.93 million worth of UNI to Wintermute. Notably, these were the same tokens received from Uniswap’s investor contract five years ago.
Such a major transfer to a market maker during a downtrend tends to capture market attention. As such, it sparked speculation about potential OTC sales, as Wintermute often dumps on behalf of its clients.
Thus, the transfer is worth watching for UNI’s next move. For now, the transfer remains unsold, and its impact can be viewed as neutral.
Liquidation risks spark panic exit
As UNI plunged to the $9 support, bulls who had taken leveraged long bets were wiped out of the market.
CoinGlass data showed that $2.89 million worth of longs were liquidated. Long liquidation often increases market pressure to the downside, leading to more losses.
Even more so, the rising liquidation risks prompted some traders to scale back or exit the market. Over the past 24 hours, for example, Uniswap saw $385 million in outflows compared to $321 million in inflows.
As a result, the Futures Netflow dropped 264% to -$63.8 million, suggesting that several traders exited their positions.
Elsewhere, the Spot market also recorded increased selling activity. CryptoQuant data showed that Exchange Netflow climbed to 660k UNI, with inflows having surged to 1.6 million UNI.
Historically, strong selling activity on both derivatives and spot weakens the market and leads to more losses.
What’s next for UNI?
With the recent slip, Uniswap‘s downside momentum is extremely elevated. In fact, the altcoin’s Relative Strength Index made a bearish crossover and fell to 61 as of writing.
The bearish crossover confirmed intense selling pressure, earlier observed. These market conditions point to a likelihood of extended weakness.
If the bearish pressure persists, UNI will fail to hold $9 and drop to $8.4. However, if the market cools down, the altcoin will hold this level and eye for another move towards $10.
Final summary
- Uniswap dropped 9% and touched a low of $9 as the market drop sparked panic exits.
- UNI’s early investor sent 1.37 million UNI, worth $12.9 million, to Wintermute, sparking selling concerns.
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