Uniswap's Native Token, UNI, Has Seen a Surge in Exchange Reserves

Uniswap's native token, UNI, has seen a surge in exchange reserves over the last 24, hours according to CryptoQuant's report.

Uniswap’s native token, UNI, has seen a surge in exchange reserves over the last 24 hours, according to CryptoQuant’s report. This indicates that more market participants are transferring their UNI tokens to exchanges, likely for selling purposes.

Earlier this year, similar behavior by BNB led to a sustained price drop as increased supply met market demand. If this trend continues with UNI, it could result in downward pressure on the token’s price.

However, despite the sell-side pressure, UNI’s price has been encountering a strong demand zone at the $6.625 level. This zone has historically provided support for the token, leading to several reversals from the indicated levels.

Moreover, UNI’s RSI (Relative Strength Index) stands at 23, placing the altcoin in the oversold territory. This suggests that UNI could be undervalued at its current price, and a bounce becomes more probable with increased buying interest.

If the bulls manage to capitalize on the current demand zone and RSI oversold condition, it could propel UNI into a short-term rally.

Interestingly, UNI’s on-chain activity also shows some positivity. Unichain recently hit $1 billion in volume on the Uniswap Protocol, as pointed out by Uniswap Labs.

Unichain just hit $1B in volume on the Uniswap Protocol ?

It’s an incredible milestone for the protocol and a testament to the strength of the Uniswap community. We're grateful to everyone who contributes to making Uniswap the leading decentralized exchange. #Uniswap #DeFihttps://t.co/B7o9h6Qp8x

— Uniswap Labs (@UniswapLabs) October 25, 2023

This signals the sustained popularity of Uniswap in the DeFi space. However, with increased good coins seen entering the protocol recently, it remains to be seen if this volume growth will translate into higher demand for UNI itself.

If the selling pressure persists and buyers fail to capitalize on the current technical setup and on-chain developments, UNI could continue its descent to test lower levels of support. Conversely, if the buyers step up and institutions join the bid in anticipation of the upcoming UNI token unlocks, it could spark the emergence of a much-needed relief rally.