Uniswap trader transfers $13M in UNI as losses hit $3M — Sign of more downside?

Uniswap Trader Sells $13M in UNI Amid Losses, Raises Concerns of Further Downside

Market Analysis

Uniswap has exhibited upside momentum on the charts, closing at higher highs for two consecutive days. However, trading volume continued to decline, dropping by 47%, which hinted at reduced market activity as investors waited for a clear market direction across the board.

Trading Activity

According to Lookonchain, a trader withdrew 1.79 million UNI, worth $13.18 million, from Venus Protocol and deposited it on Binance. The trader bought UNI a year ago at an average price of $9 and saw significant gains following the recent rally. However, following the latest trend reversal, the trader’s holdings were sitting at a loss at press time.

Market Sentiment

The trader’s decision to make such a transfer could allude to a lack of confidence in the market. However, the transfer alone is not a confirmation that a sale occurred. Typically, selling by large holders increases the available supply and can add further downside pressure.

Market Outlook

Despite the potential selling pressure from the trader, other investors, particularly in the spot market, appeared to have a different view of the market. While Uniswap traded below $8, traders continued to accumulate the altcoin. According to CryptoQuant’s Exchange Netflow data, the metric remained negative for three consecutive days and continued to fall.

Technical Analysis

Uniswap’s Relative Strength Index (RSI) remained in bearish territory at 46. At the same time, UNI traded below the 20-day EMA and was testing the 50-day EMA. Holding below the short-term MA could hint at the prevailing pressure, but the 50-day EMA could sit as a strong support.

Conclusion

The prevailing market conditions suggested that demand remains insufficient to trigger a notable rebound. This leaves the altcoin at a risk of further price drop or extended consolidation. Having said that, Uniswap is likely to hover between $7.1 and $7.5. On the other side, if demand strengthens enough, the altcoin could reclaim $8 and target $8.2.