UNI Faces 20% Downside Risk As Uniswap Labs Gears Up For V4 Upgrade

Amid the wider market's general volatility, UNI, the native token of Uniswap, the world's leading decentralized exchange, may be poised for a significant price decline.

UNI, the native token of the world’s leading decentralized exchange Uniswap, might be up for a substantial price decrease. This, as its price action on the daily charts formed bearish price patterns.

Uniswap (UNI) technical analysis and price action

As analyzed by AMBCrypto, UNI recently failed to hold on to its crucial support level at $12.50 – A price point it had maintained for the past three months. During this period, the token retested this level on more than four occasions, each time registering some upward momentum.

However, following the breakdown of this support level, sentiment for UNI turned bearish. This may have now set the altcoin up for a significant price drop on the charts.

Considering the altcoin’s recent price action and historical momentum, there was a strong possibility that UNI could drop by 20% to hit the psychological level at $9.50.

It was, however, worth noting that despite its recent bearishness, UNI was trading above its 200 Exponential Moving Average (EMA) on the daily timeframe. In simpler terms, the altcoin has been in an uptrend of sorts, notwithstanding its price performance.

$10.20 million in UNI inflows

Following the recent breakdown and the bearish chart’s pattern, investors and long-term holders were observed to be dumping their holdings on exchanges, as reported by on-chain analytics firm Coinglass. In fact, Spot inflow/outflow data showed that exchanges recorded UNI inflows to the tune of $10.20 million within the last 24 hours alone.

This hinted at a possible dump, one which could instill selling pressure and lead to further price drops on the charts.

Uniswap’s upcoming v4 upgrade

Curiously enough, this bearish outlook for UNI comes at a time when Uniswap’s much-anticipated v4 upgrade is slated for the coming week. On 22 January, Uniswap Labs took to X (formerly Twitter) to announce that v4 deployments would start rolling out this week, enabling builders to test hooks and integrations on-chain.

The project also stated that all contracts are expected to be deployed for a full launch next week. This upgrade is expected to improve Uniswap’s core infrastructure and liquidity provision.