niswap (UNI) has experienced a turbulent and challenging year. Since the peak of $19.47 in December, the token price of this decentralized exchange (DEX) has plummeted by 74%, down to $4.55 in April.
However, since mid-May, UNI has started to recover with a slow upward trend, where the 50-day moving average serves as strong support. At the time of writing, on-chain data shows signs of improvement in Uniswap's network activity.
The average 7-day transaction volume of Uniswap has continuously increased since mid-April, indicating that the demand for UNI is improving. This upward trend continues to be maintained, reflecting significant usage and demand for the platform's token.
The trading volume on Uniswap also recorded significant growth in May and June compared to April. However, the volume began to decline in late June and early July. Could this be an early signal for the upcoming price correction of UNI?
The activity in the futures and spot markets gives opposing signals.
The retail activity index from CryptoQuant is used to track the frequency of transactions and the position size of retail investors. High retail activity is often associated with overheated market conditions, helping to identify local peaks.
December 2024 and January 2025 recorded a significant increase in retail activity in the futures market. Recent weeks have also shown a similar trend, signaling that the market may be approaching a short-term peak.
In contrast, the CVD (Cumulative Volume Delta) indicator on the spot market gives a more optimistic signal. In the last three months, this indicator has maintained an upward trend since mid-May. At the time of writing, the 90-day CVD is still maintaining a positive value and trending upwards, reflecting active buying from the taker (market order placer).
This seems contrary to the retail data in the futures market. In many cases, active buy orders - also known as market orders - can be stronger signals than activity in the futures market.
On the daily chart, UNI is maintaining an upward trend with the RSI surpassing the neutral threshold of 50 and the price currently above both the 20-day and 50-day MA lines, indicating that bullish momentum is prevailing.
However, the CMF (Chaikin Money Flow) indicator is at -0.1, reflecting that capital outflows from the market are still dominant - a warning signal for potential risk.
Conclusion
When aggregating all the data, the resistance level of $8 is expected to witness significant volatility in the short term, as this seems to be a price zone of important technical significance.
Swing traders should wait for confirmation signals, entering orders only when the price breaks through the $8 mark and turns it into a support zone. Although the CVD indicator supports the buyers, investors still need to be cautious of the risk of a bearish reversal if the upward momentum is not clearly reinforced.