As the crypto market recovers from the lows of the June crash, many altcoins have experienced unprecedented growth. VeChain, Loopring and Uniswap are some of these altcoins.
UNI in particular has risen sharply in recent weeks. So much so that it will likely replace quite a few other altcoins in the rankings.
Uniswap climbs higher
After the altcoin nearly fell below $3.6 in June just after the crash, it took just under two months to recover all of its losses. In doing so, it gained more than 148.83% to reach the trading price of $9,005.
In fact, it also recovered from the May dip, with the alt on track to wipe out losses from the April crash. Still, it may not have all the ammunition it needs to break the $10 mark.
Uniswap price action | Source: TradingView – AMBCrypto
This is because the buying pressure, which has been the main strength of the altcoin all along, will soon reach its saturation point.
This can be supported by UNI’s exhaustive range of scholarships. The same is currently at its seven-month low of 59 million. In the past month, more than 4.2 million UNIs were purchased at a cost of more than $37 million by investors. This accumulation could also continue as of this writing, but could soon stop.
Uniswap accumulation | Source: Santiment – AMBCrypto
This could be because the altcoin, as seen on the Relative Strength Index (RSI), is currently overbought in the market due to the FOMO generated by the rally. Since most investors will be profit seeking traders, they can sell quickly resulting in an eventual drop in the price action (ref. Uniswap price action image).
This could appear to be happening sooner than expected. On-chain liquidations, as far as Uniswap is concerned, have been quite high in recent weeks. Shorts liquidations, in particular, were a concern as nearly $3 million in shorts liquidations were recorded at one point in July. The volume has also fluctuated since then.
Uniswap liquidations | Source: Coinglass
Ergo, new investors looking to enter the market now may want to keep a close eye on the market as a correction for UNI may be coming soon.